Inflation Speeds Up Again in January, Vaulting to Fresh 40-Year High

Inflation in the United States picked up its pace once again, accelerating to an annual 7.5 percent in January, the highest rate in 40 years and above analysts’ expectations, according to data released by the Bureau of Labor Statistics (BLS).

January’s acceleration in the Consumer Price Index (CPI), which reflects inflation from the perspective of end consumers, marks the eighth straight month of prices rising faster than 5 percent year-over-year and a faster pace than December’s 7.0 percent pace.

On a month-over-month basis, the pace of headline CPI inflation held steady at 0.6 percent in January, matching December’s pace and delivering a fresh sign of inflation stuck in high gear.

Consensus forecasts predicted a 7.3 percent rate of annual CPI and a 0.5 percent reading in the monthly measure.

Not only is January’s annual pace of CPI inflation the highest since February 1982, when it hit 7.6 percent, it is also far above the Federal Reserve’s target of 2 percent as reflected in a separate but related inflation gauge, pressuring policymakers to tighten loose monetary settings to knock some of the wind out of surging prices.