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Topline
Consumer prices rose 7.9% in the 12 months ending in February, according to data released Thursday by the Labor Department, climbing more than economists expected ahead of an unprecedented surge in gas prices that many experts warn will get even worse amid Russia’s invasion of Ukraine.
The average price Americans are paying at the pump jumped to its highest level ever this week as … [+] Russia’s invasion of Ukraine continued to fuel an unprecedented surge in oil prices.
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Key Facts
Overall prices rose 0.8% from January—higher than the 0.7% economists were expecting and the previous month’s increase of 0.6%.
On a yearly basis, prices jumped 7.9% last month, the largest annual increase since January 1982.
Key Background
Rising energy prices have elevated inflation readings during the pandemic to the highest level in decades, and stocks have struggled in recent months as Federal Reserve officials work to combat the surge by unwinding the central bank’s pandemic-era stimulus measures. After rising 27% in 2021, the benchmark S&P 500 index has tumbled 11% this year. Meanwhile, oil prices have surged amid intensifying sanctions against Russia, one of the world’s top oil-producing countries, pushing gas prices to all-time highs this week. “We’ve never been in this situation before, with this level of uncertainty,” Patrick De Haan, head of petroleum analysis at fuel-savings app GasBuddy, said in a Tuesday statement. “Americans will be feeling the pain of the rise in prices for quite some time, with little good news foreseen.”
What We Don’t Know
How aggressively the Fed will act to combat inflation. The central bank’s next two-day policy meeting concludes on March 17, when officials are expected to announce how much they’ll raise interest rates. Goldman Sachs economists project the Fed will announce seven consecutive 25-basis-point hikes at each of the remaining monetary policy meetings this year—more than double the three hikes many officials projected ahead of the latest inflation data.
Further Reading
Why Are Gasoline Prices So High? How Russia’s Invasion Of Ukraine Affects The Pump (Forbes)
Gas Prices Surge To Record High Ahead Of Russian Oil Ban—Americans Will ‘Feel The Pain’ For A While (Forbes)
The Best Investing Strategies For Inflationary Times (Forbes)
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