(NEW YORK) — Consumer prices are continuing to climb, causing new pain for Americans’ pocketbooks, as inflation tightens its grip on the economy and hobbles the post-pandemic recovery.
The consumer price index, which measures the prices consumers pay for a market basket of everyday goods and services, jumped 0.8% last month after rising 0.9% in October, the Department of Labor reported Friday. Over the last 12 months, the index climbed some 6.8% before seasonal adjustment. This marks the largest 12-month increase in nearly 40 years.
While inflation is already wreaking havoc on holiday shopping, it’s especially painful for households with limited means to absorb higher prices for essentials. Policymakers including Federal Reserve Chair Jerome Powell in recent weeks have also began walking back on assurances that it was likely a temporary, post-pandemic blip.
The so-called core index, a measure of all prices less the more volatile food and energy indices, rose 0.5% in November, building on a 0.6% increase in October. The core index climbed 4.9% over the last 12 months, the DOL said.
“Inflation is outpacing increases in household income and weighing heavily on consumer confidence, which is at a decade low,” Greg McBride, the chief financial analyst at Bankrate, said in a commentary to ABC News shortly after the data was released Friday. “It is only a matter of time before it impacts consumer spending in a material way.”
The energy index rose 33.3% over the last year after climbing 3.5% in November alone.
The food index jumped 6.1% over the last year and soared 0.7% in November.
The changes in the food and energy index mark the largest 12-month increase in at least 13 years, the DOL said.
Some of the largest contributors to soaring prices were increases in prices for gasoline, shelter, food, used and new vehicles and trucks.
Economists have attributed the rapidly climbing prices to supply-demand imbalances lingering from the pandemic shock to the economy, as labor shortages and supply chains issues result in supply not being able to keep up with the post-pandemic consumer demand for goods and services.
The painful price rises are also coming as many Americans prepare to celebrate the holidays with family and friends for the first time since a COVID-19 vaccine rolled out.
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