Inflation Reached 7.9% in February, Highest YOY Increase in 40 Years

American consumers who feel as though they’re spending more and getting less these days aren’t alone. In recent months, inflation has been a significant concern as prices on everyday items have steadily risen. Indeed, a new report shows inflation on the rise once again — and there are reasons to fear that things could climb even more.

Today, the Bureau of Labor Statistics released its latest report, showing that the Consumer Price Index rose by 0.8% in February. What’s more, over the past year, the index has risen 7.9%, marking this the highest yearly rate of inflation recorded since 1982. February’s increase was led by price spikes in the energy sector (up an average of 3.5%) while food prices also rose an average of 1%. Meanwhile, although the price of used vehicles only fell slightly, the 0.2% decrease was the first drop since September. Still, year over year, used vehicles prices have grown an average of 41.2%.

Notably, the latest report doesn’t yet reflect impacts from the war in Ukraine. While gas prices rose 6.6% in February and 38% year over year, gas prices have continued to spike since, reaching a new record high this week. Furthermore, the upward trajectory isn’t expected to reverse course for some time.

Commenting on the figures to MarketWatch, Navy Federal Credit Union corporate economist Robert Frick offered some bad news, stating, “February’s CPI reading was the highest in 40 years — again — but what was once forecast to be the inflation peak is now the jumping off point for ever higher inflation sparked by the war in Ukraine.”

Similarly, Capital Markets senior economist Sal Guatieri explained, “Inflation will catch a fourth wind from the Russian-Ukraine war,” before presenting some potentially good news, continuing, “However, assuming the situation doesn’t escalate and commodity prices pull back a bit, inflation should turn lower after the spring.”

With inflation continuing to rise, a new survey from LendingTree found that many Americans who have added debt during the pandemic cite inflation as a reason why. In total, 30% of respondents reported increasing their pandemic-era credit card debt with 48% blaming inflation as a key driver. The second most common reason offered for the increase in debt was loss of income, which was noted by 34% of respondents with rising debt.

At this point, it’s pretty clear that the U.S.’s inflation rate won’t be subsiding just yet. In turn, stocks have slumped since the release of the report. Ultimately, with fresh uncertainty coming from the war among other factors, it looks as though a return to normality might not look as normal as once hoped.


Also published on Medium.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Top 10 Personal Finance Articles of the Month — June 2022 

It’s time again for one of my favorite features here on Dyer News: a look at the top 10 personal finance articles of the month. To start, we'll take another look at financial independence and freedom. Then, with the housing market going a bit crazy lately, we'll feature a pair of articles on home buying. Lastly, we'll cover tips for one-income households, finance after death, fighting inflation, and more. As...

Bilt Rewards Launches Travel Portal with Benefits for Cardholders

Last year, the startup Bilt made a splash when it announced a new service that would reward users for paying their rent. That premise was then expanded upon with the launch of the Bilt Mastercard, which is issued by Wells Fargo. Now, continuing to capitalize on both the hype of their product and the demand for travel, Bilt has debuted another new offering for customers. This week, Bilt Rewards announced...

Cash App Introduces Round-Up Investing Feature for Debit Card

Debit card customers looking to grow their investments gained a new, automated option today as Block Inc. (formerly Square Inc.) officially announced a new feature for its popular Cash App. Now, customers with the Cash App Cash Card can opt into Round Ups as a means of growing their investments. When this feature is toggled on, Cash App will round up debit card purchases to the nearest dollar and invest...