U.S. consumer prices are up 7.9% in the last 12 months, as the cost of food, shelter and gas continued to rise in February, with gas accounting for almost a third of the CPI index’s monthly increase.
Inflation has been steadily climbing all winter, and last month was no different. The consumer price index, which tracks changes in how much Americans pay for certain goods and services, rose by another 0.8% in February, the Labor Department reported Thursday.
While the year-over-year increase in prices was the highest in 40 years, it was in line with analysts’ expectations. The cost of most consumer goods aside from food and gas rose 0.5% in February, following a 0.6% increase the prior month.
Rents were up 0.6% as well. That’s a significant increase, since housing is usually the biggest expense in household budgets. The food index also rose 1%, the largest monthly increase since April 2020.
Here’s how much prices rose for various items in the last year, according to data from the U.S. Labor Department:
Gas price increases appeared to be leveling off in January, and were down 0.8%. But the cost of fuel surged by 6.6% in February, and in the last year, gas prices are up 38%.
Gas prices have spiked dramatically in the last two weeks due to the invasion of Ukraine, which means that inflation is likely to continue throughout spring.
“I expect the energy price spike to prove mostly temporary, so that we may see some relief by midyear, depending on how long it takes for the war in Ukraine to be resolved and how long it takes other oil and gas suppliers to step in and backfill Russia’s sanctioned exports,” writes Stephen Stanley, chief economist at Amherst Pierpont, in a briefing.
Last week, Federal Reserve Chairman Jerome Powell warned the Senate Banking Committee that “we’re going to see upward pressure on inflation at least for a while” in light of the Russian invasion of Ukraine.
Powell has already indicated that he will raise the federal funds rate by 0.25% when central bank officials meet next week. An interest rate hike can help cool off inflation as it increases the cost of borrowing, which discourages spending.