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Inflation Soars 7.5 Percent to 40-Year Highs

Published: February 12, 2022
US consumer price inflation made a 40-year high after posting a 7.5 percent gain.
Prices are displayed on a selection of meat at Union Meat Company in Eastern Market in Washington, D.C., on February 8, 2022. Overall, consumer prices rose by 7.5 percent year-over-year, with food prices increasing by 7.0 percent in January compared to the month prior. (Image: STEFANI REYNOLDS/AFP via Getty Images)

Experts say the U.S. annual inflation rate reached a 40-year-high, touching 7.5 percent, primarily due to supply chain problems, fuel prices, and labor shortages, but there may be more to it.

The annual Consumer Price Index (CPI), a measure of how inflation is felt from the consumers’ end, peaked at a 7.5 percent year-over-year increase in January. 

The illustrious mark was the highest score in four decades, rates unseen since February of 1982, after reaching a year-over-year CPI index of 7.0 percent in December of 2021, the U.S. Bureau of Labor Statistics (BLS) announced in a report on Feb. 10.

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It was the eighth straight month prices rose faster than 5 percent annually, January’s 7.5 percent pace was higher than the 7.3 percent rate analysts predicted, and far higher than the Federal Reserve’s ideal standard at 2.0 percent. 

It was also higher than December’s 7.0 ratio. while keeping the same month-over-month increase compared to December steady at 0.6 percent. Experts forecasted a 0.5 percent rise. 

The indexes for energy, shelter, and food were the main culprits attributed to inflationary clout, with energy prices surging by 27 percent in January (29.3 percent in December), shelter climbing by 4.4 percent (4.1 percent in December), and food expenses burgeoning from 6.3 percent to 7 percent, the account said.

Meanwhile, core CPI, which attempts to express inflation without volatile commodity costs such as energy and food, also rose 6 percent annually and 0.6 percent monthly.

The core CPI is considered by some as a more reliable index for exposing what’s behind the inflation surge than the standard CPI.

Other categories that saw a price hike over the last month were used cars and trucks, medical care and apparel, and household furnishing and operations.

What experts say

“The price pressures on households just don’t end,” Bankrate Chief Financial Analyst Greg McBride wrote in an emailed statement to The Epoch Times.

“Not only have home prices jumped 20 percent in the past year, but now many rents are too, rising 0.5 percent in the past month alone. Nothing squeezes household budgets more than the outsized increases we’re currently seeing on costs for shelter and housing,” he added.

In another similar report by the Federal Reserve Bank of Cleveland, Chairperson Loretta Mester, a voting member of the Federal Open Market Committee (FOMC), shared her insights on the current risky inflation situation, which she dubbed “tilted to the upside.”

“While the Omicron variant may weigh on activity in the near term, the high levels of inflation and the tightness in labor markets make a compelling case to begin recalibrating the stance of monetary policy,” she said, while calling for a hastened rise in the Fed’s key interest rate by March.

Masking a deeper crisis

Skyrocketing consumer costs, stifling supply chains, and essential goods in high demand form a volcanic cocktail for already chastised costs of living worldwide under the burden of the seemingly endless COVID pandemic environment.

However, some analysts point out a looming crisis at an even deeper level. Blogger analyst Martin Vrijland commented in an article on Canada’s Freedom Convoy trucker occupation protest wherein he argues the blockades are actually meant to add fuel to the flame:

“The goal is for the borders to be, and remain blocked, because that serves the agenda of crippling supply lines, allowing governments to blame the hyperinflation predicted here for so long on deficits instead of on all those extra hundreds of billions (of dollars) being printed,” Vrijland said

“I explained why inflation is desired (even though governments and central banks pretend to prevent it). It is the ideal way to grab back the money handed out for free (in Covid relief funds). It’s part of the Great Reset agenda.”