Inflation hits new 40-year high, surging 7.9%

Inflation in the United States hit a new 40-year high in February, and consumer prices rose 7.9% from a year ago, the fastest annual rate since the Reagan administration.

Rising energy, housing and food costs boosted the rise, the Labor Department said Thursday. The price of energy has risen by 26% over the last year, greatly increasing the cost of gasoline, fuel oil and natural gas for home heating. Groceries rose 8.6% from a year ago, while clothing rose 6.6%.

Excluding volatile food and energy, consumer prices rose 6.4% year-on-year, the Labor Department said.

The data, based on mid-month polls, do not show the tension of the Russian war in Ukrainewhich is further increasing the cost of energy and threatening to tighten the already faltering supply chains.

"The war between Russia and Ukraine adds more fuel to the rate of lightning inflation by raising the prices of energy, food and raw materials that are turbocharged by worsening supply chain problems." , said Kathy Bostjancic, chief economist at the United States of Oxford Economics. a note. "This will lead to a higher short-term high in inflation and a slower decline to 2022 than expected."

Crude oil was trading at $ 108 a barrel on Thursday, a sharp rise from $ 90 before the Russian invasion, and the average price of gasoline this week hit a record high. $ 4.25 a gallon high.

For most Americans, inflation is well ahead of the wage increases many received over the past year, making it harder to pay for necessities such as food, gas and rent.

With the aim of curbing inflation, the Federal Reserve will raise interest rates several times this year from a modest rise next week. However, the Fed faces a delicate challenge: if it restricts credit too aggressively this year, it risks undermining the economy and perhaps triggering a recession.

The Associated Press contributed to the information.