US inflation rate rose to 6.8% in 2021, its highest since 1982
For six months in a row prices increased across many sectors, including gas, food and housing
The US inflation rate rose to 6.8% over the last year to its highest point since 1982, the Bureau of Labor Statistics
reportedFriday morning.
The consumer price index for all urban consumers (CPI-U) rose by 0.8% in November after rising 0.9% in October.
Price increases were seen across many sectors, including gas, food and housing. This was the sixth month in a row of price increases.
Gasoline prices rose by 58.1% in November – the largest increase over 12 months since 1980.
Within the food index, grocery store prices increased across the board for a third month in a row.
Meat, poultry, fish and eggs saw a 0.9% increase in November while cereals and bakery products saw price increases of 0.8%.
The price index that does not include food and energy rose 0.5% in November after a 0.6% increase in October.
The prices of used and new cars, household furnishings, apparel and airline fares all notably rose last month.
Ahead of Friday’s data release, Joe Biden released a
statement saying that the inflation rate “does not reflect today’s reality”.
“It does not reflect the expected price decreases in the weeks and months ahead, such as in the auto market,” Biden said in the statement.
As inflation has become a line of attack from the administration’s critics over the last few months, the White House has maintained that today’s inflation is “transitory”, or a temporary rise in prices, because of the pandemic.
The Federal Reserve last month took its first step to
curb some of its pandemic assistance after
pressure from critics around inflation.
The central bank in November ended some of its stimulus programs, in which it bought bonds to stimulate the economy.
But the Fed held off from adjusting interest rates – its main tool to control rising prices.
Rising prices tend to be a political sore spot for the party in power, though its causes are complex.
Republicans are already blaming Biden for Friday’s number, with the Senate minority leader, Mitch McConnell, criticizing Democrats on Twitter for responding to inflation “by ramming through another massive socialist spending package”, referring to the $1.75tn social and climate
spending bill that is in negotiations.
While economists have been divided over the concern the federal government should have over inflation, some have pointed out that while inflation has been rising, the
unemployment rate has remained low and
wages have been increasing.
And while
consumer confidence has dropped because of inflation, spending has been strong with retail sales
rising in October.
The article was amended on 17 December 2021 to clarify in the headline and text that the annualised inflation rate rose
to 6.8%,
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SIO TANZANIA TU UINGEREZA NAKO MAMBO SIO SAWA,
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UK inflation hits 10-year high ahead of key Bank of England meeting
The Consumer Price Index rose by 5.1% in the 12 months to November, up from 4.2% in October, which was itself the steepest incline for a decade and more than double the central bank's target.
The inflation data comes ahead of a key meeting of the Bank of England on Thursday.
GP: Oxford Street UK shoppers
Shoppers wearing protective face masks walk through the rain on Oxford Street in London on June 18, 2020, as some non-essential retailers reopen from their coronavirus shutdown.
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LONDON — U.K. inflation climbed to a 10-year high in November as consumer prices continued to soar ahead of the Bank of England's crunch monetary policy meeting on Thursday.
The Consumer Price Index rose by 5.1% in the 12 months to November, up from 4.2% in October, which was itself the steepest incline for a decade and more than double the central bank's target.
Economists polled by Reuters had expected a reading of 4.7% for November, and the Bank of England had projected that inflation would hit 5% in the spring of 2022 before moderating towards its 2% target in late 2023.
On a monthly basis, U.K. inflation rose 0.7% in November from October, above a Reuters poll for a 0.4% increase.
Core CPI, which excludes volatile energy, food, alcohol and tobacco prices, rose by 4% year-on-year against a Reuters forecast of 3.7%, and 0.5% month-on-month versus a 0.3% projection.
The Bank of England's Monetary Policy Committee meets Thursday to decide whether to tighten monetary policy, with inflation surging and the labor market remaining robust, but the rapid spread of the omicron Covid-19 variant has cast fresh uncertainty over the economic recovery in the short term.
The MPC defied market expectations in November by voting 7-2 to hold interest rates at their historic low of 0.1%, but analysts are split on whether it will pull the trigger on rate hikes on Thursday in light of the emergence of omicron.
"Unfortunately for consumers, peak inflation may still be a few months off. Today's CPI data only serves to increase the pressure on the Bank of England to raise interest rates at its MPC meeting tomorrow," said Richard Carter, head of fixed interest research at Quilter Cheviot.
"However, the Bank of England may well decide that discretion is the better part of valour and instead opt to wait until next year given the current uncertainty surrounding the impact of the Omicron variant on the economy, coupled with the risk that further restrictions may need to be introduced before long."
