Image Source: Natee K Jindakum,Shutterstock.com
- Excluding energy and food costs, consumer prices rose at an annual rate of 6.4% last month.
- The Russian invasion of Ukraine has turbocharged the prices of oil, wheat, and precious metals.
- Fed Chair Jerome Powell said last week that he would recommend raising the central bank’s interest rates by a quarter percentage point from this month.
US consumer prices accelerated at an annual rate of 7.9% in February - another four-decade high – as energy, food and services costs surged, the Labor Department said on Thursday.
The price pressure is expected to increase with disruption in the commodity market due to the ongoing Russia-Ukraine crisis.
The consumer-price index (CPI), which monitors the cost of goods and services, increased to its highest level since January 1982, when it was 8.4%, as the country struggled a bitter recession. The hike in energy prices pushed the costs of food and services and durable goods higher, the Department noted.
Strong demand for goods, persistent supply-chain constraints, and a tight labor market, which pushed wages higher, added price pressure.
The department said that excluding energy and food costs, consumer prices rose at an annual rate of 6.4% last month from 6% in January. On a month to month basis, the CPI rose 0.8% in February.
According to the latest data, oil prices rose 6.6% MoM and 38% annually. Likewise, grocery prices were up 1.4% MoM and annually at 8.6%. Similarly, housing-rental costs rose 4.7% annually, relatively at a slower pace. Used-car prices fell marginally last month, halting the double-digit rise over the past year.
Economists were hoping for a peak in inflation this spring, but the Ukraine crisis has pushed that timeline further. The Federal Reserve will likely start increasing the interest rates next week to curb the high inflation, although the Ukraine-related disruptions seemed to have thrown more challenges.
The Russian invasion of Ukraine has turbocharged the prices of oil, wheat, and precious metals.
Source: Megapixl © Pondshots
Food and housing become more expensive
Housing, food, and transportation costs have increased sharply. But prices of used cars grew slower compared to the rapid rise last year, driven by supply issues.
The benchmark Brent crude has increased by around US$40 a barrel this year. The ban on Russian energy imports may continue to push the global oil prices higher, which can further stoke inflation. Russia is one of the world’s major oil and gas suppliers.
Fed Chair Jerome Powell said last week that he would recommend raising the central bank’s interest rates by a quarter percentage point at its upcoming two-day meeting next week.
The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media LLC (Kalkine Media, we or us) and is available for personal and non-commercial use on