U.S. inflation climbs at fastest rate in 40 years

Prices in the U.S. are soaring at the fastest rate in decades.

The Bureau of Labor Statistics said Thursday the consumer price index increased 7.5 percent over the last 12 months, the fastest pace in 40 years, The Washington Post reports. This was higher than the 7.2 percent rate economists expected, according to CNBC. The Labor Department report also showed that prices rose 0.6 percent in January.

"Increases in the indexes for food, electricity, and shelter were the largest contributors to the seasonally adjusted all items increase," the report said.

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The data "underlines our view that a rapid cyclical acceleration in inflation is underway and, with labor market conditions exceptionally tight, it is unlikely to abate any time soon," Capital Economics economist Andrew Hunter said, per The New York Times.

Federal Reserve Chair Jerome Powell previously said during a confirmation hearing that "if we have to raise interest rates more over time, we will," adding, "We will use our tools to get inflation back [under control]." Sen. Joe Manchin (D-W.Va.) reacted to the data by arguing, "It's beyond time for the Federal Reserve to tackle this issue head on, and Congress and the administration must proceed with caution before adding more fuel to an economy already on fire."

President Biden, meanwhile, said Thursday that "while today is a reminder that Americans' budgets are being stretched in ways that create real stress at the kitchen table, there are also signs that we will make it through this challenge," noting that "forecasters continue to project inflation easing substantially by the end of 2022."