A key measure of inflation has now climbed at the fastest rate in 40 years.
According to the Bureau of Labor Statistics on Thursday, the consumer price index rose 7.5% in the past 12 months — the largest annual price increase since February 1982.
Many economists predicted an increase of about 7.3% in January from the previous year and 0.5% month over month.
The economy’s core prices, which exclude food and energy, climbed 6% in January from the previous year. It was a much more significant increase from December when it rose 5.5%.
It is the steepest 12-month increase since August 1982.
In January alone, prices rose 0.6%, which included seasonal adjustments. This is the same rate as in December.
Prices increased across every industry, including housing, furniture, used cars, and even medical costs.
In January, food prices climbed 0.9% compared to just 0.5% in December.
The constant inflation rate seems to signal that the Federal Reserve will raise interest rates at its next policy meeting in March. Higher interest rates make it more expensive for households and businesses to borrow money. The result would potentially slow the economy and stop the steep price increase of most goods.
The increase would be the first in more than three years. It will likely be the first of three or more quarter-point increases this year aimed at reining in sharply rising consumer prices.
Biden recently discussed a three-part plan to boost the U.S. economy to get inflation under control, including fixing the supply chain, passing his “Build Back Better” spending plan, as well as promoting competition. However, the Biden administration has been unable to make progress on this agenda thus far.