US consumer price inflation surges more than it has in 30 years
Nov 10, 2021, 7:18 AM | Updated: 7:23 am
FILE NEW YORK, NEW YORK - NOVEMBER 05: People shop at an outdoor food market in Manhattan on November 05, 2021 in New York City. Inflation is causing U.S. consumer prices to increase solidly in the past few months on items such as food, rent, cars and other goods, A new report by the United Nations Food and Agriculture Organization (FAO) shows that global food prices have hit the highest level in over a decade. In the last year alone, food prices have risen by more than 30%. (Photo by Spencer Platt/Getty Images)
(Photo by Spencer Platt/Getty Images)
(CNN) — There’s no end in sight for higher prices. US consumer price inflation surged higher again in October, the Bureau of Labor Statistics reported Wednesday.
Over the past 12 months, prices climbed 6.2% — the biggest increase since November 1990.
Stripping out food and energy prices, which tend to be more volatile, the index rose 4.6% over the same period, the biggest jump since August 1991.
The overall price index rose 0.9% in October alone, adjusted for seasonal swings, significantly more than the 0.6% economists had predicted, and overshadowing the somewhat more tepid 0.4% increase from September.
Last month’s consumer price inflation jumps came on the back of increases in multiple categories, including energy, shelter, food and cars. Food prices have risen by nearly 1% for two months in a row.
Energy costs have been going through the roof, jumping 4.8% in October and 30% over the past 12 months.
Pandemic price hikes
Rising inflation has been a hallmark of the pandemic recovery thanks to a potent mix of rampant demand, raw material shortages and choke points along the global supply chains. And the jump in energy costs is only making it worse.
While the Biden administration and the Federal Reserve have been adamant that the price hikes are temporary and to be expected as the economy rebounds from its worst crisis in a generation.
Last week, Treasury Secretary Janet Yellen told CNN that although inflation is high, it’s nowhere near as bad as the inflation spike of the 1970s, when America’s was in a state of stagflation, defined by rising prices and slow growth.
What’s the Fed going to do?
The Federal Reserve is starting to hit the brakes of its pandemic-era stimulus, starting by reducing the monthly pace of asset purchases. That could take some of the heat out of the economy. After all, keeping prices stable is one of the central bank’s main tasks.
But the hotter-than-expected October report raises the question whether the Fed is acting fast enough, or whether it has to roll back stimulus even faster.
Even though one month doesn’t make a trend and the October price jumps could be short-lived, the opposite could also be true.
American consumers are already bracing for higher prices during their holiday shopping sprees.
The-CNN-Wire
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