Inflation in the US hit its highest level in over 40 years last month as rising fuel and food costs continue to harm the world’s largest economy.
As commodity prices soar and the Russian invasion of Ukraine continues, US Labor Department data showed this week that the consumer price index leaped 7.9% from a year earlier following a 7.5% annual increase in January,
The keenly watched monthly inflation gauge increased 0.8% in February from January. February’s sharp increase reflects the steeply rising prices of gasoline, food, and housing costs. Both the monthly and the annual increases matched market expectations.
When stripped of the more volatile components such as food and energy, the core prices rose 0.5% in February on a monthly basis, whilst on an annual basis, the core price index rose 6.4% from the same time last year.
Energy Costs Keep Rising
As Oil and Gas prices hit multi-year highs, energy prices in the US surged 3.5% last month. February saw a 6.6% rise in gasoline prices. Meanwhile, over the past year, the energy index has surged more than 25%, with gasoline soaring 38%.
According to research from Cox Automotive, American SUV owners are now paying an average of $110 per month more to operate their vehicle than they were a year ago.
And things look like getting worse for the prices of commodities and the American consumer. So far with not even half of March gone, the retail price of regular-grade gasoline has soared 19.3% to $4.32 a gallon.
The soaring energy prices will push up prices for the American consumer far beyond the gas pump. Matt Smith, an oil analyst at Kpler, said: “We’re focused on that headline crude number, but that crude is used as an input to produce all manner of products.”
This week the US banned the import of Russian oil. The strong move by the Biden administration will add further pressure on oil and gas prices.
