Surging Gas, Food Costs Drive Sharpest Consumer Inflation Spike Since 1982
WASHINGTON (CBS/AP) -- Propelled by surging costs for gas, food and housing, consumer inflation jumped 7.9% over the past year, the sharpest spike since 1982 and likely only a harbinger of even higher prices to come.
The increase reported by the Labor Department reflected the 12 months ending in February and didn't include most of the oil and gas price increases that followed Russia's invasion of Ukraine on Feb. 24. Even before the war further accelerated price increases, robust consumer spending, solid pay raises and persistent supply shortages had sent U.S. consumer inflation to its highest level in four decades.
According to a Moody's report, inflation is already costing the average American family more than $200 extra a month.
The gasoline index went up 6.6% in February. The average cost of a gallon of gas in Massachusetts rose to a new record of $4.35 on Thursday.
The food index also rose 1%, with the food-at-home index jumping 1.4%. Those were both the largest monthly increase since the start of the pandemic in April 2020.
"All six major grocery store food group indexes increased in February," the Bureau of Labor Statistics reported. "The index for fruits and vegetables had the largest increase, rising 2.3 percent, its largest monthly increase since March 2010. . . The index for meats, poultry, fish, and eggs increased 1.2 percent in February as all of its major component indexes increased."
CBS News reports that the Federal Reserve is set to raise interest rates several times this year, beginning with a modest hike next week, in an attempt to curb inflation.
"The Russia-Ukraine war adds further fuel to the blazing rate of inflation via higher energy, food, and core commodity prices that are turbocharged by a worsening in supply chain problems," Kathy Bostjancic, chief U.S. financial economist with Oxford Economics, said in a note. "This will lead to a higher near-term peak in inflation and a slower descent through 2022 than previously envisaged."
(© Copyright 2022 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)