WASHINGTON — U.S. consumer prices rose 7.9% over the 12 months through February, the fastest increase in roughly four decades, intensifying pressure on household budgets and strengthening expectations that the Federal Reserve will begin raising interest rates this month.

The Labor Department’s Consumer Price Index report showed prices increasing 0.8% in February alone. Gasoline, food and shelter were among the largest contributors, with the data capturing only the earliest effects of Russia’s invasion of Ukraine and the resulting shock in global energy markets.

President Joe Biden acknowledged the strain in a statement Thursday, arguing that the strong labor recovery is being offset for many families by higher costs. The administration is increasingly framing energy inflation as a consequence of the geopolitical confrontation with Russia, while Republicans and other critics point to broader inflation that was already elevated before the invasion.

Price increases are broad, not confined to energy

Energy prices remain an important driver, but February’s data show inflation spreading across major household categories. Food costs rose sharply, shelter continued climbing and many goods remained expensive because of supply constraints, transportation bottlenecks and strong demand.

The inflation problem is therefore more difficult than a temporary gasoline spike. Housing carries a large weight in the CPI and tends to adjust more slowly than volatile energy prices. Once rent and owners’ equivalent rent accelerate, they can keep overall inflation elevated even if some commodity prices later retreat.

The squeeze is visible in paychecks adjusted for inflation. The Labor Department’s separate real earnings report showed real average hourly earnings falling 0.8% from January to February and 2.6% from a year earlier. Nominal wages are rising, but for many workers they are not keeping pace with consumer prices.

That gap matters politically and economically. A labor market with rapid hiring and wage gains would normally feel strong to households, yet falling purchasing power can make the recovery feel weaker than headline employment numbers suggest.

Gasoline adds immediate pressure

The war in Ukraine is creating a new energy shock on top of existing inflation. U.S. gasoline prices have moved sharply higher as crude oil markets react to the invasion, sanctions and uncertainty about Russian supply. Federal Energy Information Administration data show reformulated regular gasoline averaging above $4.40 a gallon in the week of March 7.

Higher fuel costs spread beyond drivers. Diesel and transportation costs affect trucking, agriculture, manufacturing and delivery networks, creating a pathway for energy prices to show up in food and merchandise prices later. Airlines and other fuel-intensive businesses also face higher operating expenses.

The February CPI largely predates the steepest post-invasion jump in oil and gasoline. That means the March inflation report could capture additional pressure even if some other categories begin to moderate.

The labor market remains unusually strong

The inflation surge is occurring alongside robust hiring rather than recession. The latest employment report showed 678,000 jobs added in February and unemployment falling to 3.8%. Leisure and hospitality, professional and business services, healthcare and construction all posted gains.

That strength gives the Federal Reserve more room to tighten monetary policy without immediately prioritizing unemployment. The central bank has already ended most emergency-era asset purchases and has signaled that a rate increase is likely at its March meeting.

The Federal Reserve’s Beige Book describes businesses across the country reporting rising input costs, labor shortages and continued difficulty obtaining some materials. Many firms have been able to pass costs to customers, though contacts in some industries are increasingly concerned about consumer resistance.

The Fed faces a narrowing path

The central bank’s challenge is to reduce inflation without unnecessarily damaging the labor-market recovery. Higher interest rates can cool demand for homes, vehicles, business investment and other credit-sensitive activity, but they cannot directly produce more oil, semiconductors or shipping capacity.

That means monetary policy must work partly by slowing overall demand enough to bring it back into balance with constrained supply. If inflation expectations become embedded in wage negotiations and business pricing, officials may feel pressure to move more aggressively. If energy shocks and geopolitical uncertainty weaken growth on their own, aggressive tightening could add to the slowdown.

The administration, meanwhile, is emphasizing policies intended to increase domestic productive capacity, reduce supply-chain vulnerabilities and lower specific costs. Those measures operate on a different timetable from Fed policy and are unlikely to reverse the current inflation rate quickly.

For households, the immediate arithmetic is simpler. Prices are rising faster than average inflation-adjusted wages, gasoline is becoming more expensive and housing costs continue to climb. The February CPI confirms that inflation is no longer a narrow problem confined to a few pandemic-disrupted products. It is broad enough to shape decisions by the White House, Congress, the Federal Reserve and millions of American families.