The consumer price index for all items rose 0.6% in January, driving up annual inflation by 7.5% which marked the biggest gain since February 1982
The consumer price index (CPI), which measures the costs of dozens of everyday consumer goods, rose 7.5% compared to a year ago vs. an estimate of 7.2%, the Labor Department reported.
Consumer prices in January surged more than expected over the past 12 months, indicating a worsening outlook for inflation and cementing the likelihood of substantial interest rate hikes this year, reports CNBC.
The closely watched inflation gauge was the highest reading since February 1982. On a percentage basis:
- Fuel oil rose the most in January, surging 9.5% as part of a 46.5% year-over-year increase.
- Vehicle costs, which have been one of the biggest inflation contributors since it began surging higher in the spring of 2021, were flat for new models and up 1.5% for used cars and trucks in January.
- Shelter costs, which make up about one-third of the total CPI number, increased 0.3% on the month and is up 4.4% over the past year and could keep inflation readings elevated in the future.
- Food costs jumped 0.9% for the month and are up 7% over the past year.
The hotter-than-expected inflation reading may prompt the Federal Reserve to accelerate interest rate hikes — a full percentage point increase by the start of July, according to CNBC.
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