Inflation reached new 40-year high in February
Inflation continued surging in February, according to new government data.
Driving the news: Prices for the goods and services Americans consume rose 6.4% in the 12 months ended in February, according to new government data, the highest since 1982 and up from 6% in January.
- The personal consumption expenditures price index favored by the Federal Reserve showed 5.4% year-over-year inflation even when volatile food and energy were excluded, up from 5.2% and far above the 2% the Fed aims for.
By the numbers: For the month, prices were up 0.5%, or 0.4% excluding food and energy.
- Contrary to the pattern for most of the pandemic, inflation for durable goods was zero, while it was 1.8% for nondurable goods and 0.3% for services.
- Food prices rose 1.4% and energy prices rose 3.7% in February alone, helping explain consumer discontent with inflation.
The glass half full story: Month-on-month core inflation receded a bit, at 0.4% after four straight months at 0.5%.
- Glass half empty: That still annualizes to an uncomfortably high 4.9%.
The new readings on inflation, incomes and consumption spending predate the impact of the Ukraine war, which began at the end of February. The war is likely to contribute to a surge in energy and food prices in the coming months.