Inflation reaches fresh 40-year high at 7.5%

Inflation soared to fresh heights in January, now at 7.5%, the highest reading in 40 years. It’s also more than the 7.2% economists expected, hitting Americans’ wallets even harder.

Here’s where consumer prices are up the most over the past year:

• Used cars: +40.5%
• Gas: +40%
• Natural gas: +23.9%
• Meats, fish, eggs: +12.2%
• New cars: +12.2%
• Electricity: +10.7%
• Overall CPI: +7.5%
• Food at home: +7.4%
• Food away from home: +6.4%
• Transportation: +5.6%
• Shelter: 4.4%

But is overall inflation even higher than the reported 7.5%? Shelter is the single biggest component of the Consumer Price Index, carrying about a third of the total weight. At 4.4%, skeptics are questioning the calculation used by the Bureau of Labor Statistics. That’s because according to indexes like Apartment List’s National Rent Report, rent prices have actually spiked an unprecedented 18% the last year, a far cry from CPI’s 4.4%.

Putting percentages aside, what Americans know without looking at monthly CPI is that inflation is too hot, far worse than the Federal Reserve’s target of 2% per year. The Fed will have January and February’s numbers in hand when the board meets in March to determine potential rate hikes. They’ve already penciled in rate hikes at that time but with inflation persisting and increasing, analysts wonder if the latest figures will trigger a more aggressive response.