WASHINGTON–Inflation in the U.S. hit its highest point in more than 30 years, according to data released by the Labor Department today.
The consumer price index, which is made up of a basket of products ranging from gasoline and health care to groceries and rents, rose 6.2% from a year ago. That figure was above many analysts’ already high projections.
On a monthly basis, the CPI increased 0.9% against the 0.6% estimate, according to CNBC.
Stripping out volatile food and energy prices, so-called core CPI was up 0.6% against the estimate of 0.4%. Annual core inflation ran at a 6.2% pace, compared to the 4% expectation and the highest since November 1990, the Labor Department said.
"Prices increased at a faster rate in October due to ongoing supply chain problems and increasing demand," said CUNA Senior Economist Dr. Dawit Kebede. "Used car prices that had been declining for the last two months increased in October as computer chip shortages, labor, and transportation issues worsened,limiting supply of new vehicles.
“Shelter prices, which fell at the start of the pandemic and are still lower than their pre-pandemic trend, are still rising, contributing to the large increase in inflation.
“The Federal Reserve in its recent November meeting stated that inflationary pressures are still transitory and that they will be monitoring incoming data closely," Kebede continued. "October's CPI report is the highest rate seen in several decades. Consumers are paying higher prices for homes, auto, food, and energy. This might force the Fed to reconsider its assessment concerning the timing of an interest rate increase."
Increases By Category
Other increases in CPI included:
- Fuel oil prices soared 12.3% for the month, part of a 59.1% increase over the past year. Energy prices overall rose 4.8% in October and are up 30% for the 12-month period, according to the new data.
- Used vehicle prices rose again, rising 2.5% on the month and 26.4% for the year. New vehicle prices were up 1.4% and 9.8% respectively.
- Food prices, where many consumers are really feeling inflation, also showed a “sizeable bounce,” CNBC noted, and were up 0.9% and 5.4% respectively. Within the food category, meat, poultry, fish and eggs collectively rose 1.7% for the month and 11.9% year over year.
Wages Vs. Inflation
In a separate report, the Labor Department said real wages after inflation fell 0.5% from September to October, the product of a 0.4% increase in average hourly earnings that was more than offset by the CPI surge, CNBC said.
“Shelter costs, which make up one-third of the CPI computation, increased 0.5% for the month and are now up 3.5% on a year-over-year basis, pointing to more reasons for concern that inflation could be more persistent than policymakers anticipate,” the report noted. “The annual pace is the highest since September 2019.”