Inflation Surges to 40-Year High

Red-hot inflation is continuing to erase wage gains while leaving Democrats increasingly worried about their electoral prospects this November.

WATCH:

The consumer price index for all items rosed by 0.6% during January, driving annual inflation up 7.5%.

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%.

Sponsored