Inflation in U.S. climbed 7.5% over the past year to highest level in 40 years

Feb. 10 (UPI) -- Inflation in the United States continued its historic rise in January, the Commerce Department said in its monthly report Thursday -- rising by more than 7% from January 2021 to January 2022.

The department said prices for goods in the United States increased by 7.5% during that 12-month span -- to the highest level the Consumer Prices Index has seen since 1982.

From December to January, the rise was 0.6%, excluding food and energy prices.

The report was almost a mirror image of the inflation snapshot in December, when the department said prices were up 7% year-to-year.

"Increases in the indexes for food, electricity, and shelter were the largest contributors to the seasonally adjusted all items increase," the department said in a statement.

Traders work on the floor of the New York Stock Exchange in New York City on January 12. Many experts believe that rising consumer prices virtually guarantee a series of interest rate increases in the coming months. Photo by John Angelillo/UPI

"The food index rose 0.9% in January following a 0.5% increase in December. The energy index also increased 0.9% over the month, with an increase in the electricity index being partially offset by declines in the gasoline index and the natural gas index."

The department said Thursday's report showed the seventh time in the last 10 months that the index has climbed month-to-month by at least 0.5%.

"Along with the index for shelter, the indexes for household furnishings and operations, used cars and trucks, medical care, and apparel were among many indexes that increased over the month," the department added.

The energy index was up 27% year-to-year and the food index 7%.

Most economists expected the report to show an increase of 7.2% for the past 12 months ending in January. Many experts believe that the consistent and significant rise in consumer prices virtually guarantee that the Federal Reserve will order a series of interest rate hikes in the coming months.

The Fed decided at its last meeting in January to leave rates unchanged, near zero.

President Joe Biden has at times sought to downplay grim economic reports by pointing to positive indicators.

"My two top economic priorities have been to create a growing economy with more good-paying jobs, and to lower the prices Americans have faced from the global problem of inflation related to the pandemic," Biden said in a statement Thursday. "We have seen historic success on the first priority.

"On higher prices, we have been using every tool at our disposal, and while today is a reminder that Americans' budgets are being stretched in ways that create real stress at the kitchen table, there are also signs that we will make it through this challenge."

"While today's report is elevated, forecasters continue to project inflation easing substantially by the end of 2022," he added. "And fortunately we saw positive real wage growth last month. ... We separately saw good news with new unemployment claims continuing to decline. That's a sign of the real progress."