The numbers: The rate of U.S. inflation rose again in February to 7.9% — a 40-year high — and Americans could face even more pain because of the Russian war on Ukraine.
The consumer price index rose 0.8% in the month, spurred by the higher cost of gasoline, food and housing, the government said Thursday.
The increase surpassed/or was below Wall Street’s forecast of a 0.7% gain.
The surge in the cost of living in the past 12 months is the biggest since January 1982.
Americans are paying more to fuel up, put food on the table and cover the cost of housing. Prices of autos and many other consumer goods have also soared to record highs.
Until very recently, Wall Street economists and the Federal Reserve had expected the increase in inflation to crest soon and start to ease.
Yet the Ukraine conflict has triggered big increases in the cost of oil, wheat and other commodities, threatening to prolong the bout of high U.S. inflation. The cost of gasoline just hit a record high, with a gallon costing more than $6 in some places.
The Fed, for its part, is on track to raise interest rates in March for the first time in four years to try to reverse the spike in inflation. It may take a while before rate hikes have much effect, however, since they are so low.
A separate measure of consumer inflation that strips out volatile food and energy prices also rose 0.5% last month.
The increase in the so-called core rate over the past 12 months rose to 6.4% from 6%. That’s the highest level since the middle of 1982.
Big picture: High inflation isn’t going away anytime soon as the Fed had hoped. Even a rapid and sharp increase in interest rates — which no one expects — would have little effect in the short run.
Record oil prices and the rising costs of many other goods and services promise to keep the rate of inflation at levels not seen since the early 1980s. The Ukraine conflict is adding to the upward pressure on prices.
Economists still expect inflation to slow later in the year, but consumers won’t get relief anytime soon. Prices are rising even faster than the 5% increase in hourly wages over the past year.
Until a big rebound on Wednesday, stocks had been on a losing streak because of rising inflation and the Ukraine conflict.