Consumer prices surged last month at their fastest pace since 1982, soaring inflation in items ranging from food to shelter showing no signs of slowing down.
The Consumer Price Index, which tracks the price of a wide range of products, rose 6.8% in November from a year ago, the Labor Department said on Friday. Core inflation, which excludes food and volatile fuels, rose 4.9% in that 12-month period.
The price increases affected a wide range of commodities, with food, shelter, new and used cars and gasoline all posting the largest year-over-year increases. Energy costs have increased 33% in the past year, food costs have increased 6%, and prices for used cars and trucks have climbed 31%.
The persistence of high inflation surprised the Federal Reserve and its chairman, Jerome Powell, who for months described the sharp price hikes as “transient” and a short-term consequence of harassed supply chains. But two weeks ago he, implicitly acknowledging that high inflation has lasted longer than expected.
That inflation was fueled by a mix of factors resulting from the rapid rebound from the pandemic recession: a flood of government stimulus, Fed-designed ultra-low rates, and supply shortages at factories in the United States and abroad. Manufacturers have been slowed down by strong customer demand, COVID-related closures and overwhelmed ports and freight stations.
Soaring prices have also held back consumers. While worker compensation has also grown at a steady pace this year as employers try to attract workers into a tight labor market, wage growth has failed..
Economists expect inflation to slow in the coming months, amid falling oil prices and uncertainty over new variants of the coronavirus.
“[W]With energy prices falling sharply in recent weeks, last month probably marked the peak, “said Paul Ashworth, chief US economist at Capital Economics, in a report.
This is a developing story. The Associated Press contributed reporting.