February CPI rose 7.9% year-on-year

US consumers paid more for a variety of goods and services in February than the previous month and year, with prices rising across the economy amid persistent supply and demand imbalances.

The Bureau of Labor Statistics’ Consumer Price Index (CPI) rose 7.9% in February from a year ago, posting the fastest annual jump since 1982. Previous January 40-year high rate of 7.5%Economists’ consensus forecasts, according to Bloomberg data.

On a monthly basis, increases in consumer prices also accelerated. The CPI rose 0.8% in February compared to January after rising 0.6% during the previous month.

The surge in energy prices was a major contributor to the latest CPI print. Even before Russia invaded Ukraine and raised concerns about global energy disruptions, oil and gas prices were on the rise, as demand for fuel oil and other energy products outpaced limited global supplies. In February, the energy index jumped 3.5%, marking the largest monthly rise since October. Over the past year, the energy index has risen 25.6%.

Another impact from the Russia-Ukraine crisis and the extended jump in energy prices that followed is likely to be seen in March CPI data, given that the invasion first began in late February. Since then, gas prices at the pump have jumped to record highs, and crude oil prices have soared to 14-year highs and topped $130 a barrel at least for a while.

“Thursday’s inflation data is a continuing confirmation that inflation is not temporary and has not peaked. Thursday’s data for February, which does not explain the early rise in oil prices in March,” said Robert Shen, chief investment officer at Blank Sheen Wealth Management. In a letter Thursday morning. “We believe there will be stronger inflation reports over the coming months, which indicates that the Federal Reserve needs to accelerate plans to raise interest rates, even as the renewed uncertainty emerged from the crisis in Russia and Ukraine.”

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Russia’s isolation from other global economies has also led to volatility in agricultural commodities including wheat – of which Russia is the world’s largest exporter – and Added the specter of another jump in food prices.

In February, the food price index rose 1% month over month, also up slightly from January’s 0.9% rise. This, in turn, was driven by food prices at home which rose by 1.4% and brought the annual increase in this indicator to 8.6%.

Even excluding volatile food and energy prices, the so-called core CPI also accelerated in February. Core CPI rose 6.4% in February from a year ago to also set the fastest rate since 1982. Shelter prices – one of the most consistent inflationary categories – rose in February, and rental prices rose 0.6% month-on-month. Airfares jumped 5.2% to more than double the increase from January, as fading Omicron virus cases helped fuel demand for travel. However, prices for used cars and trucks — which were closely watched as a shortage of cars drove up used car prices — fell for the first time since September, dropping 0.2% month over month.

But even with the current tight labor market and increasing wages for many workers, inflation is still rising at a faster rate than profits have been able to match. Average hourly wages last rose at a 5.1% annual rate in February, Labor Department data showed last week.

“Strong wage increases are not commensurate with the higher costs households face on rent, food, electricity, gasoline, and a pervasive list of both goods and services,” said Greg McBride, chief financial analyst at Bankrate, in an email on Tuesday. . “The purchasing power of Americans is shrinking more and more every day, and you see that reality reflected in the harsh consumer sentiment readings.”

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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