The annual inflation rate in the US rose to 7.9% in February of 2022, the highest since January of 1982.
Energy was the main contributor with 25.6% vs. 27% and gasoline prices surging 38%
from 40% in January. But there are a myriad of other challenges.
by Mary Foran
The annual inflation rate in the US rose to 7.9% in February of 2022, the highest since January of 1982, matching market expectations which predict an 8.5 percent inflation rate for the next quarter.
Energy was the main contributor with 25.6% vs. 27% and gasoline prices surging 38% from 40% in January. That meant a $5 and up prices at the gasoline pump over much of the country.
Inflation for shelter rose 4.7% vs. 4.4% and for food, 7.9% vs. 7%, the largest increase since July of 1981. Food at home increased 8.6% vs. 7.4%.
New vehicles rose 12.4% vs. 12.2% while used cars and trucks rose 41.2% vs. 40.5%.
The surge in energy costs due to the war in Ukraine is still to come. Inflation was seen peaking in March but recent developments in Europe coupled with ongoing supply restraints, strong demand, and labor shortages will maintain inflation elevated for longer (source: US Bureau of Labor Statistics).
The US economy is facing a myriad of challenges with the war in Ukraine, high grocery bills, spiking gasoline prices, a splintered supply chain, the lingering pandemic and rising interest rates that slow growth.
The Biden White House is betting the US economy is strong enough to withstand these threats, but there are growing fears among voters of an economic slump and including some Wall Street analysts.
Did President Joe Biden build a durable recovery full of jobs with last year’s $1.9 Trillion dollar relief package, or an economy overfed by government aid that could cause a sharp downturn?
Voters will get to decide in the midterms whether or not the Democrats have handled government programs well or if a change of management is in order.
Featured image/Joseph Gage, CC BY-SA2.0
Grocery/Tariq Abro on Unsplash
Biden/jlhervàs, CC BY2.0, cropped
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