New data indicate that inflation has reached a three-decade high.
Consumer prices continued to rise alarmingly sharply last month, as the inflation crisis casts a shadow over the post-pandemic economic recovery, according to Labor Department data Wednesday.
The consumer price index, often used as an inflation barometer because it measures the prices consumers pay for everyday goods and services, jumped 0.9% last month, higher than expected. The government said it rose 6.2% since last October, the biggest 12-month increase since November 1990.
The so-called “core index,” or the measure for all commodities except the more volatile food and energy indices, rose 4.6% over the past 12 months. The Labor Department said this represented the biggest one-year increase since August 1991. In October alone, the core index climbed 0.6% after rising 0.2% in September.
Last month alone the energy index climbed nearly 4.8% and the gasoline index rose 6.1%. This is the fifth consecutive monthly increase in petrol prices.
With sharp increases in prices for energy, shelter, food, used cars and trucks, increases in consumer prices were seen widely across multiple indices, the DOL said. New vehicles were the biggest contributor to the overall price hike.
DOL said the airline fares and alcoholic beverages index saw a decline last month.
Economists have said the rise in prices has been linked to a boom in consumer demand for goods and services since the pandemic is over. Meanwhile, supply chain issues and an apparent lack of workers accepting low-wage jobs have added to rising inflationary fears among policymakers.
While some expected the inflation data seen in recent months to reflect a temporary blip, the latest data released on Wednesday could raise further concerns about the hold of inflation on the economy. Many are now watching how the Federal Reserve will react to the latest indicators as it plans to start back on pandemic measures to prop up the economy during the health crisis.
President Joe Biden reacted to the new economic data in a statement Wednesday morning, saying that addressing inflation was a “top priority” for his administration and adding his Build Back Better plan to address the economic pain caused by it. described as a method.
“Inflation hurts Americans’ pocketbooks, and reversing this trend is a top priority for me,” the president said, adding that the report said the bulk of the price increase is due to rising energy costs.
Biden said he has instructed his National Economic Council to “pursue means to try to further reduce these costs, and to call on the Federal Trade Commission to strike back on any market manipulation or price hikes in the region.” asked for.”
“The other price hike reflects the ongoing struggle to restart smooth operations in the economy: I am traveling to Baltimore today to highlight how my infrastructure bill will reduce these costs, overcome these constraints.” Will do less, and make stuff more available and less expensive.” he added. “And I want to re-emphasize our commitment to the independence of the Federal Reserve to monitor inflation, and to take the necessary steps to combat it.”
Biden said more than a dozen Nobel Prize-winning economists have said that “my plan will ‘reduce inflationary pressures’,” adding that it would do so “without raising taxes on those making less than $400,000 or adding to the federal debt.” , the richest does without the need of “and the big corporations start paying their fair share in taxes.”
“We are making progress on our recovery. Jobs are up, wages are up, home values are up, personal debt is down, and unemployment is down,” the president said. “We have more work to do, but there is no question that the economy continues to improve and is in better shape today than it was a year ago.”