An unprecedented surge in U.S. inflation reached another four-decade high in January, accelerating to a 7.5% annual rate. On Thursday, the Department of Labor said the consumer-price-index – which measures what consumers pay for goods and services – reached its highest level since February 1982 when compared with January of the previous year. This topped December’s 7% annual rate, with both figures well above the 1.8% annual rate for inflation in 2019.
Prices rose sharply for several everyday household items, including food, cars, housing and electricity. Housing rentals experienced a particularly sharp uptick, contributing to the increase.
Used car prices represented another sharp increase, rising 40.5% in January over the previous year. Food prices jumped 7%, the sharpest rise since 1981. Restaurant prices saw their most significant jumps since the 1980s while grocery prices increased 7.4%. Meat and egg prices continued to climb at double-digit rates, according to the Labor Department data. Experts have estimated that inflation is adding as much as $250 a month to living expenses and businesses.
High inflation has also amounted to a nearly 2% wage decrease for the average worker, according to the recently released data. Though wages have increased at the fastest rate in 15 years, increasing consumer prices have eroded those gains, ultimately leading to an overall decrease in pay. Real hourly wages (earnings minus inflation) fell by 1.7% in the 12 months through January 2022.
President Biden said he expects inflation to taper off midway through 2022 during an interview with NBC’s Lester Hold on Thursday. “According to Nobel laureates, 14 of them that contacted me, and a number of corporate leaders, it ought to be able to start to taper off as we go through this year,” Biden told Holt. Holt then reminded Biden that in July, he said that price increases would be temporary, but have instead continued. “You’re being a wise guy with me a little bit,” said Biden. “And I understand, that’s your job,” the president continued before blaming supply chain woes for the surge.
Inflation had biggest spike since 1982.
NBC’s Lester Holt: “Back in July you said inflation was going to be temporary… A lot of Americans are wondering what your definition is temporary is.”
President Biden: “You’re being a wise guy.” pic.twitter.com/DWAdD9vfFp
— Steve Guest (@SteveGuest) February 11, 2022