Inflation rose by 7.9% in February to the highest level since 1982

Inflation rose by 7.9% over the past 12 months. This is the highest level in 40 years.

According to CNBC, inflation grew worse in February as a result of the escalating crisis in Ukraine. The February acceleration was the fastest since January 1982, when the economy was dealing with higher inflation and reduced economic growth.

The CPI gained 0.8% on a month-over-month basis. Economists expected inflation to increase to 7.8% for the year and 0.7% for the month.

Food prices have also increased by 1%, which was the fastest monthly gain since April 2020, during the pandemic. Energy is up 3.5% for February, accounting for about a third of the headline gain. Shelter costs are up another 0.5% for a total of 4.7% over 12 months. This is the fastest annual increase since May 1991. 

Core inflation, excluding food and energy prices, rose 6.4%. This is the highest since August 1982. This rise in inflation means worker paychecks have fallen further behind. Inflation-adjusted average hourly earnings for the month fell 0.8% in February. Earnings frose 5.1% from a year ago, but have been outweighed by the price increases.