Inflation hit a 40-year high in January as the consumer price index rose 7.5% over the past 12 months. That marks the highest increase since 1982 and was higher than the 7.2% predicted by economists. Stock futures were down after the report was released by the Department of Labor.
The increase was driven by food prices, which were up by 7% and fuel and gas saw a whopping 27% increase over the past year. While wages were up during the past year, when factoring in inflation, workers saw their real wages increase by just 0.1%.
The latest numbers are unlikely to alter the Federal Reserves’ plan to increase interest rates next month as it works to wind down its stimulus policies meant to help stabilize the economy during the coronavirus pandemic.
“With another surprise jump in inflation in January, markets continue to be concerned about an aggressive Fed,” Barry Gilbert, asset allocation strategist at LPL Financial, told CNBC. “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.”
