WASHINGTON — An inflation gauge that is closely monitored by the Federal Reserve jumped 6.1% in January compared with a year ago, the latest evidence that Americans are enduring sharp price increases that will likely worsen after Russia’s invasion of Ukraine.
The figure reported today by the Commerce Department was the largest year-over-year rise since 1982.
Robust consumer spending has combined with widespread product and worker shortages to create the highest inflation in four decades — a heavy burden for U.S. households, especially lower-income families faced with elevated costs for food, fuel and rent.
At the same time, consumers as a whole largely shrugged off the higher prices last month and boosted their spending 2.1% from December to January, today’s report said, an encouraging sign for the economy and the job market. That was a sharp improvement from December, when spending fell. Americans across the income scale have been receiving pay raises and have amassed more savings than they had before the pandemic struck two years ago. That expanded pool of savings provides fuel for future spending.
Inflation, though, is expected to remain high and perhaps accelerate in the coming months, especially with Russia’s invasion likely disrupting oil and gas exports. The costs of other commodities that are produced in Ukraine, such as wheat and aluminum, are rising, too.
President Joe Biden said Thursday that he would do “everything I can” to keep gas prices in check. Biden did not spell out details, though he mentioned the possibility of releasing more oil from the nation’s strategic reserves. He also warned that oil and gas companies “should not exploit this moment” by raising prices at the pump.