Inflation Jumps to Fastest Rate Since 1982

MBA NewsLink Staff

The Consumer Price Index jumped by 0.8 percent in February from January and roared ahead by 7.9 percent to its fastest annual pace in 40 years, the Bureau of Labor Statistics reported Thursday.

In January, the CPI increased by 0.6 monthly and by 7.5 percent annually on a seasonally adjusted basis.

The report cited increases in indexes for gasoline, shelter and food as biggest contributors to the seasonally adjusted all-items increase. The gasoline index rose by 6.6 percent in February and accounted for nearly one-third of the all-items monthly increase; other energy component indexes were mixed. The food index rose by 1.0 percent as the food at home index rose by 1.4 percent; both were the largest monthly increases since April 2020. 

BLS said the index for all items less food and energy rose by 0.5 percent in February following a 0.6-percent increase the prior month. The shelter index was by far the biggest factor in the increase, with a broad set of indexes also contributing, including those for recreation, household furnishings and operations, motor vehicle insurance, personal care and airline fares.  

The 7.9 percent rise in the all-items index for the 12 months ending February was the largest since the period ending January 1982. The energy index rose by 25.6 percent over the past year; the food index increased by 7.9 percent, the biggest 12-month increase since July 1981.

“Although the magnitude and drivers were largely as expected, inflation continues to rage at a pace deeply unsettling for consumers and policymakers alike,” said Sarah House, Senior Economist with Wells Fargo Economics, Charlotte, N.C. “The recent surge in commodity prices stand to push inflation even higher. With core inflation already running well-ahead of the Fed’s goals, we look for the FOMC to kick off a series of rate hikes at its meeting next week.”