Gas, food, and lodging prices – which are essential, not discretionary – drove up prices in February.
February prices rose 0.8%, adjusted for seasonal fluctuations, An increase more than in January.
Food prices rose 1% last month, the largest monthly increase since April 2020. Over the past 12 months, food prices rose 7.9%, the largest jump since July 1981. Grocery prices rose 8.6% faster than for the year Past. The same period, the largest increase since April 1981.
Gasoline prices alone rose 6.6% and contributed about a third of the overall increase in inflation in February. Over the past year, it’s up 38%.
About a third of the 24 cents a gallon increase in the price of regular gas occurred in the last five days of the month, after Russia’s invasion of Ukraine, according to data compiled by the AAA Oil Price Information Service. But prices have since jumped, with a gallon of regular gas up 71 cents, or about 20%, since the end of February, to $4.32 a gallon on Thursday. This does not bode well for the March inflation numbers.
Economists had hoped that the pandemic price hikes of the past months, spurred by supply chain problems and rising demand, would begin to subside as the year progressed. But with the conflict between Russia and Ukraine expected to pay
Economists at Action Economists preliminarily put their March inflation forecast at 8.6% over the 12-month period, they said Thursday morning. This would be a level not seen since December 1981.
In the meantime, Americans have to dig into their pockets to pay their daily expenses.
Spending on credit and debit cards increased by an average rate of 15.7% in the 28 days ending March 5, compared to the same period last year, according to aggregated data from Bank of America.
“Record high gas prices are starting to create headwinds for consumers, but the overall impact is still minimal as of early March,” said Anna Zhou, US economist at Bank of America. The bank found that both low-income and high-income households spent more as gas prices rose.
“Rising gas prices are particularly painful for low-income consumers. On the one hand, gas makes up a larger share of their total spending. On the other hand, low-income consumers tend to work in sectors where remote work is not an option, so paying for Demand is inelastic for gas prices.
Eliminate flyaway food and basic energy costs Inflation rose to 6.4% during the 12-month period ending in February, the highest level since August 1982. Prices rose 0.5% last month, slightly lower than they were in January.
CNN’s Betsy Klein and Chris Isidore contributed to this report.