U.S. Rate of Inflation Highest Since 1990

Inflation over the past 12 months raced the quickest since 1990, according to government data released Wednesday, Nov 10, as U.S. consumers spent more in October for a broad range of products.

Most noticeable, energy prices logged sharp gains for the month and from a year ago. American also paid more for shelter and vehicles — both new and used. Food prices increased the same in October as in September but they surged stronger from a year earlier.

In the headline monthly figure, U.S. consumer prices jumped 0.9% in October after gaining 0.4% in September, the Labor Department said in its monthly report on the Consumer Price Index (CPI). The CPI is a broad measure of what Americans pay for everyday items ranging from eggs to electricity.

The monthly gain matches the increase in June, which registered as the largest 1-month pick up since the 1% increase in June 2008.

"The monthly all items seasonally adjusted increase was broad-based, with increases in the indexes for energy, shelter, food, used cars and trucks, and new vehicles among the larger contributors," the Labor Department’s monthly report said.

In several key consumer pricing categories:

  • Gas prices jumped 6.1% in October from 1.2% in September. They soared 49.6% year-over-year.

  • The broader index for energy, which combines items like gasoline, electricity and fuel oil, surged 4.8% compared to 1.3% previously. Energy prices advanced 30% in the past 12 months.

  • Prices for food rose 0.9% for a second month in a row. Food prices increased 5.3% year-over-year.

Excluding the more volatile food and energy components, core consumer prices increased 0.6% in October after climbing 0.2% in September. Both represent smaller gains compared to matching increases of 0.9% in April and June — the highest points since April 1982.

Shelter or housing costs for the month increased 0.5% from 0.4%, and they rose 3.5% from a year earlier. Components of shelter include pricing items like rent for apartments, rental equivalence, lodging away from home such as hotels and motels, and housing at schools. The index accounts for about one-third of the entire CPI.

New vehicle prices rose 1.4% from 1.3% and jumped 9.8% from a year earlier. Uses car and truck prices for the month climbed 2.5% after slipping 0.7% in September. They are 26.4% higher than a year ago.

Clothing prices were unchanged after falling 1.1% in September, but they picked up 4.3% from a year earlier.

Airline fares declined 0.7% over the month after dropping 6.4% in the prior month.

In the headline annual figure, inflation in the United States rose 6.2% in the 12 months ended October against 5.4% previously. The current rate of inflation is the highest since the period ending November 1990.

Core inflation rose 4.6% over the past 12 months, for the largest increase since the 12-month period ending August 1991 and compared to 4.0% previously. The core, "all items less food and energy" index is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set its key interest rate.

"Supply disruptions and the recovery of services poses a substantial concern that higher-than-expected inflation could persist for longer than the Fed believes," Reuters quoted Sam Bullard, a senior economist at Wells Fargo in Charlotte, North Carolina. "We expect goods inflation to hand the baton to services over the course of the next year, but all signs indicate that supply chain bottlenecks will keep fanning the flames on inflation in the near term."

The following table of key inflation figures is for the last seven months through October, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on November 10, 2021. To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.

April to October 2021 Consumer Prices – Gains & Losses in Percent

  April 2021 May 2021 June 2021 July 2021 August 2021 September 2021 October 2021 12 Month
All items 0.8 0.6 0.9 0.5 0.3 0.4 0.9 6.2
  Food 0.4 0.4 0.8 0.7 0.4 0.9 0.9 5.3
    Food at home 0.4 0.4 0.8 0.7 0.4 1.2 1.0 5.4
    Food away from home 0.3 0.6 0.7 0.8 0.4 0.5 0.8 5.3
  Energy -0.1 .0 1.5 1.6 2.0 1.3 4.8 30.0
    Energy commodities -1.4 -0.6 2.6 2.3 2.7 1.3 6.2 49.5
      Gasoline (all types) -1.4 -0.7 2.5 2.4 2.8 1.2 6.1 49.6
      Fuel oil -3.2 2.1 2.9 0.6 -2.1 3.9 12.3 59.1
    Energy services 1.5 0.7 0.2 0.8 1.1 1.2 3.0 11.2
      Electricity 1.2 0.3 -0.3 0.4 1.0 0.8 1.8 6.5
      Utility (piped) gas service 2.4 1.7 1.7 2.2 1.6 2.7 6.6 28.1
  All items less food, energy 0.9 0.7 0.9 0.3 0.1 0.2 0.6 4.6
    Commodities less food, energy 2.0 1.8 2.2 0.5 0.3 0.2 1.0 8.4
      New vehicles 0.5 1.6 2.0 1.7 1.2 1.3 1.4 9.8
      Used cars and trucks 10.0 7.3 10.5 0.2 -1.5 -0.7 2.5 26.4
      Apparel 0.3 1.2 0.7 .0 0.4 -1.1 .0 4.3
      Medical care 0.6 .0 -0.4 0.2 -0.2 0.3 0.6 -0.4
    Services less energy 0.5 0.4 0.4 0.3 .0 0.2 0.4 3.2
      Shelter 0.4 0.3 0.5 0.4 0.2 0.4 0.5 3.5
      Transportation 2.9 1.5 1.5 -1.1 -2.3 -0.5 0.4 4.5
      Medical care .0 -0.1 .0 0.3 0.3 -0.1 0.5 1.7

 

The BLS releases inflation data around the middle of a month for consumer prices surveyed up to the previous month. The Consumer Price Index (CPI) for November and the latest annual period become public on December 10, 2021.

CPI data is used in calculating inflation rates and in this site’s U.S. Inflation Calculator. The US Inflation Calculator shows cumulative inflation and the change in buying power of the U.S. dollar over time.

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