Surging Food and Energy Prices Push Inflation to 40-Year High
March 10, 2022
Surging energy and food prices in February pushed inflation to the highest level in four decades.
The consumer price index, which measures a wide-ranging basket of goods and services, increased 7.9% over the past 12 months, according to the Labor Department’s Bureau of Labor Statistics. That is the fastest pace since January 1982.
On a month-over-month basis, the CPI gain was 0.8%. Economists surveyed by Dow Jones had expected inflation to increase 7.8% for the year and 0.7% for the month.
Food and energy both saw big price increases in February. Overall food prices were up 1% for the month, while the prices for food at home jumped 1.4%, both the fastest monthly increase since April 2020. Energy prices surged 3.5%, accounting for roughly one-third of the month’s headline gain.
The so-called “core” inflation rate, which strips out volatile categories like food and energy, rose 6.4%, the highest since August 1982.
Climbing prices means that the purchasing power of workers’ paychecks fell further behind, despite what would otherwise be considered strong wage gains. Headline earnings in February rose 5.1% from a year prior, but when adjusted for inflation, the average hourly wages fell 2.6% over the same period.