US Inflation Spikes To 7.5% In January, Highest In 40 Years

Prices had risen seven percent over the course of 2021 amid supply chain snarls, strong consumer demand and shortages of crucial components, fueling a drop in President Joe Biden's approval ratings

US consumer prices rose at an annual rate not seen since February 1982, with a 7.5 percent increase over the 12 months to January, government data showed Thursday.

Compared to December, the Labor Department said the consumer price index (CPI) rose 0.6 percent, more than analysts had expected and confirming the potency of the ongoing inflation wave hitting the world's largest economy.

Prices had risen seven percent over the course of 2021 amid supply chain snarls, strong consumer demand and shortages of crucial components, fueling a drop in President Joe Biden's approval ratings and a rapid shift in the Federal Reserve's policy.

The central bank is now strongly signaling it will raise interest rates for the first time since the pandemic began at its meeting in March.