Consumers in the U.S. likely to have paid more for good and services in February compared to the prior month and preceding year amid soaring inflation and commodity costs and lingering supply chain crisis.
The Bureau of Labor Statistics is set to release its February Consumer Price Index (CPI) on Thursday which would given an outlook on the extent of inflation pressure on the world’s largest economy.
According to Bloomberg estimates, CPI is likely to jump by 7.8% in February compared to preceding year underscoring the fastest annual jump since 1982.
The estimates also show on a monthly basis price increase likely to have accelerated as well. The figure shows CPI likely to have rose by 0.8% in February compared to January.
Main attribution behind surging inflation could be pointed towards surge in energy prices. It is to be noted even before Russia-Ukraine war broke out global energy prices were rallying at record high. In January, the energy index was already up by 27% compared to the same month in 2021.
Excluding volatile energy and food prices, the core CPI likely to have accelerated as well in February. Consensus estimates by Bloomberg shows a jump by 6.4%, marking the fastest increase since 1982.
Economists are looking for a pick-up in core categories including vehicle and rent prices, alongside a rise in airfares and lodging prices as Omicron-related disruptions from January faded.
“At the component level, our focus, per usual of late, will be on rents and vehicle prices,” Deutsche Bank economists Jiefu Luo and Justin Weidner wrote in a note Tuesday.
“Given that rents are one of the components of the CPI for which the Phillips curve seems to work, these elevated prints are likely a function of the tight labor market.”
“Robust pay increases have been no match for the higher costs households are facing on rent, food, electricity, gasoline, and a pervasive list of both goods and services,” Greg McBride, chief financial analyst at Bankrate, said in an email on Tuesday to Bloomberg.
“The buying power of Americans is being squeezed more and more each day, and you see this reality reflected in the dour consumer sentiment readings.”