WASHINGTON (AP) -- Consumer inflation in the United States likely set another 40-year high in February -- and it won't even reflect the oil and gas spikes of the past week, which will likely catapult prices even higher in coming months.
Energy prices, which soared after Russia's invasion of Ukraine on Feb. 24, jumped again this week after President Joe Biden said the United States would bar oil imports from Russia.
A report Thursday from the government is expected to show that consumer inflation leapt 7.9% in February compared with 12 months earlier, according to data provider FactSet. That would be the biggest such increase since January 1982. Analysts have also estimated that prices rose 0.7% from January to February.
For most Americans, inflation is running far ahead of the pay raises that many have received in the past year, making it harder for them to afford necessities like food, gas and rent. As a consequence, inflation has become the top political threat to Biden and congressional Democrats as the midterm elections draw closer. Small business people now say in surveys that it's their primary economic concern, too.
Seeking to stem the inflation surge, the Federal Reserve is set to raise interest rates several times this year beginning with a modest hike next week. The Fed faces a delicate challenge, though: If it tightens credit too aggressively this year, it risks undercutting the economy and perhaps triggering a recession.
For now, solid consumer spending, spurred in part by a further reopening of the economy as omicron fades, on top of higher wages and pricier gas, will likely send inflation higher for months. Gas prices spiked to $4.25 Wednesday, up about 55 cents a gallon just since the end of February.
Oil prices did fall back Wednesday on reports that the United Arab Emirates will urge fellow OPEC members to boost production. U.S. oil was down 12% to $108.70 a barrel, though still up sharply from about $90 before Russia's invasion.
Yet energy markets have been so volatile that it's impossible to know if the decline will stick. If Europe were to join the U.S. and the United Kingdom and bar Russian oil imports, analysts estimate that prices could soar as high as $160 a barrel.
The economic consequences of Russia's war against Ukraine have upended a broad assumption among many economists and at the Fed: That inflation would begin to ease this spring because prices rose so much in March and April of 2021 that comparisons to a year ago would decline.
"Any hope that inflation will peak in the near term is long gone," said Eric Winograd, senior economist at asset manager AllianceBernstein.
Should gas prices remain near their current levels, Winograd estimates that inflation could reach as high as 9% in March or April.
The cost of wheat, corn, cooking oils and such metals as aluminum and nickel have also soared since the invasion. Ukraine and Russia are leading exporters of those commodities.
Even before Russia's invasion, inflation was not only rising sharply but also broadening into additional sectors of the economy. Many prices have jumped over the past year because heavy demand has run into short supplies of items like autos, building materials and household goods.
But in other areas unaffected by the pandemic, like rents, costs are also surging at the fastest pace in decades. Steady job growth is encouraging more people to move into their own apartments, elevating rental costs by the most in two decades. Apartment vacancy rates have reached their lowest level since 1984.
In the final three months of last year, wages and salaries jumped 4.5%, the sharpest such increase in at least 20 years. Those pay increases have, in turn, led many companies to raise prices to offset their higher labor costs.
Soaring energy costs pose a particular challenge for the Fed. Higher gas prices tend to both accelerate inflation and weaken economic growth. That's because as their paychecks are eroded at the gas pump, consumers typically spend less in other ways.
That pattern is similar to the "stagflation" dynamic that made the economy of the 1970s miserable for many Americans. Most economists, though, say they think the U.S. economy is growing strongly enough that another recession is unlikely, even with higher inflation.