CHARLOTTE, N.C. — All goods and services cost more in 2022 than they did just one year ago.
The Consumer Price Index rose 7.9% from February 2021 to February 2022. Consumer Price Index, or CPI, is “a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services,” as defined by the U.S. Bureau of Labor Statistics.
The latest 12-month tally shows energy prices rose 25.6% from February 2021 to February 2022, too.
Food prices increased 7.9% during that same year-long period which is the largest 12-month jump since July 1981.
More specifically, the CPI for meats, poultry, fish and eggs increased 13% over the past year, making it the biggest year-to-year increase since July 1979.
According to the CPI, new vehicle prices increased by 12.4% which is the largest yearly increase since May 1975.
Even before the war in Ukraine further accelerated price increases, robust consumer spending, solid pay raises and persistent supply shortages had sent U.S. inflation to its highest level in four decades. What’s more, housing costs, which make up about a third of the government’s consumer price index, have risen sharply, a trend that’s unlikely to reverse anytime soon.
“The numbers are eye-watering, and there is more to come,” said Eric Winograd, senior economist at asset management firm AllianceBernstein. “The peak in inflation will be much higher than previously thought and will arrive later than previously expected.”
The government’s report in early March showed that from January to February, inflation rose 0.8%, up from a 0.6% increase from December to January. Excluding the volatile food and energy categories, so-called core prices rose a sharp 0.5% month to month and 6.4% from a year earlier. Economists tend to monitor core prices because they more closely reflect longer-running inflation trends.
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For most Americans, inflation is running far ahead of the pay raises that many have received in the past year, making it harder for them to afford necessities like food, gas and rent. As a consequence, inflation has become the top political threat to President Joe Biden and congressional Democrats as the midterm elections draw closer. Small business people say in surveys that it’s their primary economic concern, too.
Seeking to stem the inflation surge, the Federal Reserve is set to raise interest rates several times this year, beginning with a quarter-point hike next week. The Fed faces a delicate challenge, though: If it tightens credit too aggressively this year, it risks undercutting the economy and possibly triggering a recession.
From January to February, nearly every category of goods and services got pricier. Grocery costs jumped 1.4%, the sharpest one-month increase since 1990, other than during a pandemic-induced price surge two years ago. The collective price of fruits and vegetables rose 2.3%, the largest monthly increase since 2010. Gas prices spiked 6.6%, clothing 0.7%.
Most economists, though, say they think the U.S. economy is growing strongly enough that another recession is unlikely.
Contact Carolyn Bruck at cbruck@wcnc.com and follow her on Facebook, Twitter and Instagram.
The Associated Press contributed to this report.
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