Red-hot inflation is continuing to erase wage gains while leaving Democrats increasingly worried about their electoral prospects this November.
WATCH:
BREAKING: #inflation just hit its highest level since 1982. pic.twitter.com/t14GkpbBjC
— Squawk Box (@SquawkCNBC) February 10, 2022
The consumer price index for all items rosed by 0.6% during January, driving annual inflation up 7.5%.
OOPS! US #inflation much hotter than expected. Jan CPI jumped 7.5% YoY from 7% in Dec, 40y high & way above 7.3% expected. Inflation mainly driven by mismatch between supply & demand. Excluding volatile food & energy components, core prices increased 6% YoY, also most since 1982. pic.twitter.com/i0JVumlhph
— Holger Zschaepitz (@Schuldensuehner) February 10, 2022
The numbers are staggering. Along with being higher than Wall Street's expectations, they represent a near four-decade high.
You have to go all the way back to February 1982, as CNBC explains:
The monthly CPI rates also came in hotter than expected, with headline and core CPI both rising 0.6%, compared with the estimates for a 0.4% increase by both measures.
Stock market futures declined following the report, with rate-sensitive tech stocks hit especially hard. Government bond yields rose sharply, with the benchmark 10-year Treasury note touching 2%, its highest since August 2019.
Excluding volatile food and fuel prices, so-called core inflation increased by 6% since January 2021, its highest annual increase since August 1982.
One investment strategist asked by Fox Business all but said that the worst is still to come:
“U.S. annual CPI is the highest since 1982, and what's worse is that this likely isn't the peak,” said Seema Shah, chief strategist at Principal Global Investors. “Higher-than-expected monthly gains in core CPI indicate continued underlying heat and will do nothing to relieve pressure on the Fed to tighten sharply and urgently.”
According to the U.S. Department of Labor, energy prices increased by 27% over the past 12 months. Meanwhile food increased by 7% and gas shot up by 40%.
JUST IN: The @USDOL released new report for #inflation for Jan. The CPI on all items went up 7.5%! This is the largest 12-month change since 1982.
— Susanne Brunner (@SusanneBrunner) February 10, 2022
Energy⬆️27%
Food⬆️7%
Gas⬆️40%
Here's a list of other items. @wfaa @WFAADaybreak #iamup pic.twitter.com/9dEXYIk4ZB
Hey, DEMS! Kiss your free ride GOODBYE!