US Inflation Rose 7.9% In The Last Year As Stress Mounts From War In Ukraine

Inflation in the U.S. has hit another grim level by rising to 7.9% in February, the highest since January 1982. The data was released as Russia’s war in Ukraine rages and interest-rate hikes by the Federal Reserve are expected.

On Thursday, the U.S. Labor Department reported its monthly reading of the Consumer Price Index (CPI), which showed inflation rose to 0.8% between January and February.

Driving this change is the persistence of supply chain bottlenecks, labor shortages and lingering fears about the COVID-19 pandemic. However, Russia’s war against Ukraine and the resulting economic sanctions have thrown more variables into the volatile mix.

The war’s impact on the U.S. economy is largely felt in rising gas prices. The gasoline index rose 6.6% in February and accounted for almost one-third of all monthly price increases. Food rose 1%, and all items excluding food and energy prices rose 0.6% since January.

President Joe Biden warned for weeks leading to Russian President Vladimir Putin’s decision to invade Ukraine on Feb. 24 that U.S. sanctions against Russia would impact American consumers. This has been primarily felt at the gas pump.

As of Thursday morning, average gas prices in the U.S. stood at $4.06 per gallon, which is 45 cents more than a week ago, 62 cents more than a month ago, and $1.30 more than a year ago, according to the American Automobile Association.

Biden has announced a ban on Russian oil imports to the U.S. He promised that his administration would do what it could to bring down prices.

A meeting of the Federal Reserve is set for next week. The central bank is expected to hike interest rates. Fed Chairman Jerome Powell said the war in Ukraine was doing little to influence the central bank’s desire to raise rates.