- The Consumer Price Index rose 7.9% year-over-year in February, the government said Thursday.
- That matched the median economist estimate and marked the fastest inflation since January 1982.
- The measure also gained 0.8% through the month, accelerating from January's 0.6% leap.
It's not just gasoline. Prices for a wide range of goods leaped higher in February, further intensifying the inflation problem that's plagued the US for much of the past year.
The Consumer Price Index — a closely monitored measure of US inflation — gained 7.9% in the year through February, the Bureau of Labor Statistics said Thursday morning. Economists surveyed by Bloomberg expected to see a year-over-year pace of 7.9%. The reading marks a healthy acceleration from January's 7.5% pace and the fastest one-year inflation since January 1982.
The latest data shows prices continuing to surge higher even as the Omicron wave ended and the country reopened again. Inflation was initially expected to cool late last year as supply chains healed, yet lingering pain in the global logistics industry and new pressures on commodity prices have kept the problem around.
Russia's invasion of Ukraine has been the biggest factor boosting inflation in the past few weeks. Initial fears of an attack hit crude oil and natural gas prices, as Russia's energy sector plays a major role in feeding the global supply. The conflict has since lifted prices for a range of other commodities including wheat, nickel, and fertilizer. Though February only includes the first few days of Russia's invasion, the new release still captures some of the initial market activity as investors began to price in the attack.
The CPI measure also rose 0.8% through the month, according to the report, similarly matching the average economist forecast. That marked a pickup from the 0.6% gain seen in January, signaling inflation is still running red hot month-by-month.
Core CPI, which strips out volatile food and energy prices, rose 0.5% in February, slowing from the 0.6% pace seen a month earlier. That, too, matched economist estimates.
Soaring prices for gas, rent, and food were the biggest drivers of February's stronger inflation. The government's gas-price measure leaped 6.6% through the month, sharply accelerating from the 0.8% decline seen the month prior. Food prices edged 1% higher, and shelter costs notched a 0.5% gain. Demand for those goods and services tends to stay elevated even when the Federal Reserve lifts interest rates. Their large upticks through February hint that, even if price growth cools across other categories, broad inflation is set to remain elevated in the coming months.
Other goods and services saw encouraging slowdowns in inflation or outright price declines over the month. Electricity prices fell 1.1% after January's 4.2% gain. Used cars and trucks, which previously fueled much of the US's pandemic inflation, saw prices drop by 0.2% following the prior month's 1.5% increase. Apparel inflation also eased to 0.7% growth from 1.1%.
There could soon be more cooling where that came from. The Federal Reserve is poised to raise interest rates at its March 16 policy meeting, kicking off a cycle of monetary tightening aimed at reining in inflation. Higher rates tend to cool spending and, in turn, leave businesses better equipped to match supply with demand. The February report is all but guaranteed to be the last of the near-zero-rate era.
There's a long way to go before inflation returns to its pre-pandemic trend, and fears of persistently strong price growth remain. But as the Fed embarks on its hiking cycle, CPI will offer the first hints at just how quickly inflation will cool.