Prices for U.S. consumers jumped 6.8% in November from a year earlier, soaring costs for food, energy, shelter and other items left Americans with their rates highest annual inflation rate since 1982.
The Labor Department also reported on Friday that from October to November, prices jumped 0.8%.
Inflation has intensified the pressure on consumers, especially low-income households and especially for daily necessities. It also canceled out the higher wages many workers received, complicated the Federal Reserve’s plans to cut aid to the economy, and coincided with waning public support for President Biden.
Inflation has been fueled by a mix of factors resulting from the rapid rebound from the pandemic recession: a flood of government stimulus, ultra-low rates designed by the Fed, and supply shortages at factories in the United States. and abroad. Manufacturers have been slowed by stronger than expected customer demand, COVID-related closures and overwhelmed ports and freight stations.
Employers, struggling with labor shortages, have also raised wages, and many have raised prices to offset their higher labor costs, adding to the inflation.
This has resulted in price spikes for goods ranging from food to electronics, furniture and used vehicles. The acceleration in prices, which began after the pandemic struck as Americans trapped in their homes flooded factories with orders for goods, has spread to services, including apartment rents, restaurant meals. , medical services and entertainment.
Persistently high inflation surprised the Fed, whose chairman Jerome Powell had for months called inflation only “transient,” a short-term consequence of congested supply chains. Two weeks ago, however, Powell signaled a change, implicitly acknowledging that high inflation has lasted longer than he expected. He suggested that the Fed would likely act faster to phase out its ultra-low rate policies than it previously anticipated.
Some economists are hoping that inflation will peak over the next few months and then gradually subside and bring some relief to consumers. They note that supply shortages in some industries have started to gradually ease. And while higher energy costs will continue to weigh on consumers over the next several months, Americans will likely be spared from earlier predictions that energy prices would hit record highs over the winter.
Oil prices fell slightly, which in turn led to a slight drop in gasoline prices. A gallon of gasoline costs an average of $ 3.38, according to AAA, up from $ 3.42 a month ago.
Even more dramatic, natural gas prices have fallen almost 40% from a seven-year high reached in October. The result is that while average home heating costs will far exceed last year’s levels, they will not increase as much as feared.
Food prices could also decline due to steep declines in corn and wheat prices from their early-in-the-year highs.