U.S. consumer prices reportedly soared in February to their biggest annual high in 40 years and inflation is expected to continue to rise in the coming months following the Russian-Ukrainian wars that pushed up prices for crude oil and other commodities.
The consumer price index (CPI) rose 0.8% last month after gaining 0.6% in January based on a Labor Department report on Thursday. In the 12 months to February, the CPI jumped 7.9%, the largest year-on-year increase since January 1982. That followed a 7.5%jump in January and was the fifth consecutive month of annual CPI readings above 6%.
This reading is in line with the expectations of economists who also forecast increases of 0.8% and 7.9% in the CPI. With this Inflation has exceeded The Fed's target of 2.0%. U.S. central bank is expected to start raising interest rates next Wednesday to ease inflation, with economists expecting as many as seven rate hikes this year.
Last month’s CPI data did not fully capture the surge in oil prices following the conflict between Russia and Ukraine on 24 February. Prices rose more than 30%, with global benchmark Brent hitting a 2008 high of $ 139 a barrel, before falling on Wednesday after reports that the United Arabs called on OPEC member partners to increase production.
The United States and its allies have imposed harsh sanctions on Moscow, with President Joe Biden on Tuesday banning Russian oil imports into the country. Russia is the second largest exporter of crude oil in the world.
According to David Kelly, head of global strategy at JPMorgan Funds in New York, if the average gasoline was close to $ 4.20 for the year, that would add more than $ 1,000 to average household spending. The Russo-Ukrainian war, which has also boosted prices for wheat and other commodities, was seen sustaining uncomfortable inflation in the second quarter.
Low -income households bear the brunt of high inflation as they spend more of their income on food and gasoline.
