CHICAGO - Skyrocketing inflation rates are costing the average American household $296.45 in extra expenses, according to a recent analysis.
Ryan Sweet, a senior economist at Moody’s Analytics, came to the number following the latest Labor Department data revealing that consumer prices spiked 7.9% in February, according to data obtained by FOX Business.
Sweet took the average spending of U.S. households in February and compared it to what would have been spent in 2018 and 2019, when inflation hovered at 2.1%.
The CPI over just the past six months rose 2.5% — a staggering level of growth, with an increase of .8 in February alone before Russia invaded Ukraine. Energy rose by 3.5% in February following a 0.9% gain in each of the two prior months.
"There is no doubt that the Federal Reserve will increase the target range for the fed funds rate later this month as higher energy prices are making the central bank's problems even worse," Sweet wrote in his analysis.
"The Fed will respond."
Inflation hit a 40-year high in February, driven in part by higher gas prices. The consumer price index climbed 7.9% on an annual basis, according to data released Thursday by the Bureau of Labor Statistics. Inflation rose 0.8%, month over month.
The year-over-year reading compares with an annual 7.5% jump in January. It's the fastest increase since February 1982, when inflation hit 7.6%.
From January to February, nearly every category of goods and services grew more expensive. Gas jumped 6.6% and accounted for almost a third of price hikes. Grocery costs jumped 1.4%, the sharpest one-month increase since 1990, other than during a pandemic-induced price surge two years ago. The cost of fruits and vegetables rose 2.3%, the largest monthly increase since 2010.
Inflation is outpacing the rate of pay raises for most Americans. The February data were taken before Russia's invasion of Ukraine, which pushed prices at the pump to $4.31 as of Thursday – a record high – according to AAA. The Biden administration has repeatedly blamed Putin for rising gas prices.
The New York Post first reported this data.