LONDON ( Web News )
Consumer prices rose 7.9% in the 12 months ending in February, according to data released Thursday by the Labor Department, climbing at the quickest pace in four decades amid an unprecedented surge in gas prices that many experts warn will get even worse amid Russia’s invasion of Ukraine.
Overall prices rose 0.8% from January—higher than the 0.7% economists were expecting and the previous month’s increase of 0.6%.
On a yearly basis, prices jumped 7.9% last month, the largest annual increase since January 1982.
The overall increase was the result of broad gains across gasoline, shelter and food prices, the government said, pointing out a 6.6% monthly increase in the price of gas accounted for almost a third of the overall increase.
Stock futures remained negative immediately after the release, with the Dow Jones Industrial Average down 300 points, or 0.9%, while the tech-heavy Nasdaq fell 1%.
In emailed comments Thursday, Robert Schein, the chief investment officer of California-based Blanke Schein Wealth Management, called the latest data “continued confirmation that inflation is not transitory and has not peaked,” adding that he believes there will be even stronger inflation reports over the coming months, particularly after the spike in oil prices this month.
“It is too early to link the recent rise in oil prices to any type of immediate recession, but historically, recessions have followed periods of surging energy prices,” says Schein.
Rising energy prices have elevated inflation readings during the pandemic to the highest level in decades, and stocks have struggled in recent months as Federal Reserve officials work to combat the surge by unwinding the central bank’s pandemic-era stimulus measures. After rising 27% in 2021, the benchmark S&P 500 index has tumbled 11% this year. Meanwhile, oil prices have surged amid intensifying sanctions against Russia, one of the world’s top oil-producing countries, pushing gas prices to all-time highs this week. “We’ve never been in this situation before, with this level of uncertainty,” Patrick De Haan, head of petroleum analysis at fuel-savings app GasBuddy, said in a Tuesday statement. “Americans will be feeling the pain of the rise in prices for quite some time, with little good news foreseen.”