The cost of living in the United States rose 0.4 percent in February, the Labor Department announced on Friday. This increase in the consumer price index, which follows a 0.2 percent spike in January, was driven by the jump in recent months in the price of gasoline.
Gasoline prices have increased between 17 and 18 percent since December. People are paying 31 cents more for gas than they did last month, and on Friday, the price at the pump rose again for the seventh consecutive day. The average price nationwide for a gallon of regular gasoline is now $3.83, according to the AAA Daily Fuel Gauge Report, but nearly one-third of the nation’s drivers are shelling out $4 or more, USA Today reports.
Inflation and cost of living ranks below retirement savings and health care costs as the most significant financial concerns at this time, according to a February Millionaire Corner investor survey. Not surprisingly, it is of particular concern to retirees (28 percent) and seniors over the age of 50 (26 percent).
The increase in the consumer price index was the largest in 10 months and is due primarily to a 6 percent spike in the gasoline index, the largest increase since December 2011. This accounted for more than 80 percent of the change in the all items index, which has risen 2.9 percent over the past year.
Overall inflation has increased 2.9 percent over the past year, unchanged since last month. The index for all items less food and energy increased 2.2 percent, while the 12-month change in the food index fell to 3.9 percent, its lowest level since last June. In contrast, the 12-month change in the energy index was 7 percent in February, up from 6.1 percent in January.
Companies for now seem to be bearing the brunt of increased gas prices before passing them on to customers. “Firms are reluctant to raise prices to consumers because the demand isn’t there and consumers are price sensitive,” PNC Financial economic Gus Faucher told USA Today.
Other indexes trending higher over the past year include clothing (4.2 percent), medical care (3.4 percent), new vehicles (3 percent) and used cars and trucks (2.9 percent). The cost of shelter, household furnishings and operations, and recreation rose more slowly.
Rising gas prices have also taken a toll on consumer confidence, according to the University of Michigan Consumer Sentiment Survey also released Friday. The index dropped to 74.3 from 75.3, ending a string of six consecutive months of improvement. The preliminary report reflects lowered expectation for future economic conditions.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.