The Labor Department said Thursday that consumer prices jumped 7.5% last month compared with a year earlier, the steepest year-over-year increase since February 1982.
WASHINGTON — Inflation soared over the past year at its highest rate in four decades, hammering American consumers, wiping out pay raises and reinforcing the Federal Reserve’s decision to begin raising borrowing rates across the economy.that consumer prices jumped 7.5% last month compared with a year earlier, the steepest year-over-year increase since February 1982. The acceleration of prices ranged across the economy, from food and furniture to apartment rents, airline fares and electricity.
“Just as price pressures in some areas ease, inflation in other parts of the economy” is picking up, said Sarah House, an economist at Wells Fargo. “The upshot is that inflation is likely to remain uncomfortably high.” To help pay bills, she’s also picked up more hours at a Harris Teeter grocery store. But the store is 30 minutes from her house, so she’s had to spend more on gas.
In the past year, sharp increases in the costs of gas, food, autos and furniture have upended many other Americans’ budgets, too. In December, economists at the University of Pennsylvania’s Wharton School estimated that the average household had to spend $3,500 more than in 2020 to buy an identical basket of goods and services.Thursday’s report will intensify pressure on the Fed and its chair, Jerome Powell, to tighten credit to try to slow the economy enough to cool inflation.
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