Inflation Reaches 7.5%, Breaking 40-Year Record

Consumer prices rose 7.5% over the past year, the highest rate of inflation since 1982, according to figures released Thursday (Feb. 10) by the U.S. Bureau of Labor Statistics.

“Increases in the indexes for food, electricity and shelter were the largest contributors to the seasonally adjusted all items increase,” the department said in its report.

Last month’s report saw inflation rise to 7%, which was also its highest level in 40 years.

Read more: Inflation Hits 7%, Highest Level in 40 Years

The food index increased 0.9% last month following a 0.5% increase in December, with the “food at home” index rising 7.4% in the last year, with increases occurring in all six of the major grocery food categories, most notably the index for meats, poultry, fish and eggs, which climbed 12.2% over the year.

The energy index also rose by the same amount, with a rise in the electricity index being somewhat offset by decreases in the gasoline index and the natural gas index.

Setting aside food and energy prices, the Consumer Price Index rose 0.6% in January, the same increase as December and the seventh time in the last 10 months it has risen at least 0.5%.

Even a smaller 6% rise in all items less food and energy was record-setting, the department noted, marking the largest 12-month change since August 1982. The energy index rose 27% over the last year, while the food index rose by 7%.

As CNBC noted, the news makes it all the more likely that the Federal Reserve will raise interest rates soon. The network pointed to CME data that says the chance of a 0.5 percentage point rate increase next month rose to 44.3% after the data release, compared with 25% just before.

“With another surprise jump in inflation in January, markets continue to be concerned about an aggressive Fed,” said Barry Gilbert, asset allocation strategist at LPL Financial. “While things may start getting better from here, market anxiety about potential Fed overtightening won’t go away until there are clear signs inflation is coming under control.”