The Cost of Living climbed again in November and drove the rate of U.S. inflation to a nearly 40-year of 6.8%, putting more pressure on households as they confront rising prices of gas, food, cars and rents.
The consumer price index increased 0.8% last month, the government said yesterday. Economists polled by The Wall Street Journal had forecast a 0.7% advance.
The pace of inflation over the past year escalated to 6.8% from 6.2% in the prior month. That’s more than triple the Federal Reserve’s 2% target and is the highest rate since July 1982.A string of higher-than-expected inflation readings since the summer is likely to push the Fed to speed up plans to phase out stimulus for the economy by the early spring, several months earlier than it had planned.
Top central bank officials meet next week to plot their next step.
Worried about the economic and political consequences, the White House has also moved to try to help untangle knots in the U.S. supply chain that are contributing to high inflation. Many goods and materials are in short supply and prices have risen as a result.
Another closely watched measure of inflation that omits volatile food and energy costs jumped 0.5% last month. This so-called core rate is closely followed by economists as a more accurate measure of underlying inflation.
The 12-month increase in the core rate climbed to 4.9% from 4.6% and remained at a 30-year peak. The last time the core rate reached 5% was in mid-1991.
Soaring inflation is outstripping the biggest increase in worker wages in decades. Inflation-adjusted hourly pay was 1.9% lower in November compared to a year ago. Paychecks aren’t buying as much as they used to buy. The stunning surge in U.S. prices this year could peak in the next few months as supply-chain bottlenecks are gradually undone, but high inflation is likely to last well into 2022. (MW)