U.S. Rate of Inflation Soars to 39-Year High as Consumer Prices Jump in November

Inflation in the United States increased further in November as American consumers paid more, again, for a broad range of goods and services, driving the annual inflation rate to its highest point in more than 39 years, according to government data released Friday, Dec. 10.

Inflation pressures have been aggravated not only by surging prices for food and energy, but also by increased costs for shelter, vehicles, clothing, and medical care.

In the headline monthly figure, U.S. consumer prices climbed 0.8% in November, the Labor Department said Friday 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 clothing to cars.

"The monthly all items seasonally adjusted increase was the result of broad increases in most component indexes, similar to last month. The indexes for gasoline, shelter, food, used cars and trucks, and new vehicles were among the larger contributors," the Labor Department’s monthly report said.

Consumer prices rose 0.9% in October and in June. The monthly levels rank the highest since the 1% increase in June 2008.

"There’s no question no matter how you look at it, even if you take out the extremes caused by the pandemic, it’s still very high inflation," CNBC quoted Randy Frederick, managing director of trading and derivatives at Charles Schwab. "This is still supply chain disruption, semiconductor-related inflation."

In several key consumer pricing categories:

  • Prices at the pump advanced 6.1% for a second month in a row. Gas prices are 58.1% higher year-over-year, the biggest 12-month increase since April 1980.

  • The broader index for energy, which combines items like gasoline, electricity, and fuel oil, slowed some, rising 3.5% in November after increasing 4.8% in October. Energy prices jumped 33.3% in the past 12 months.

  • Overall food prices rose 0.7% last month after two straight increases of 0.9%. Food prices are 6.1% higher year-over-year, with the cost of groceries up 6.4% and eating out prices up 5.8%.

Excluding the more volatile food and energy components, core consumer prices increased 0.5% in November after rising 0.6% in October. Both represent smaller increases than the matching 0.9% gains in April and June — the highest points since April 1982.

Shelter or housing costs rose 0.5% for a second month in a row, and they are 3.8% 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.

"One could derive comfort from the thought that headline inflation has peaked, as recent indicators point to supply-chain bottlenecks turning the corner," Bloomberg Economics’ Anna Wong and Andrew Husby said. "Even so, we expect that inflation will remain elevated in the coming months — hovering around the current level — due to strong momentum in the stickier component of housing costs."

New vehicle prices rose 1.1% from 1.4% and surged 11.1% from a year earlier. Used car and truck prices, meanwhile, increased 2.5% for second straight month, jumping 31.4% from a year ago.

Clothing prices increased 1.3% in November after being unchanged in October. They are 5% higher from a year earlier.

Airline fares rose 4.7% last month, a notable change after declines of 0.7% in October and 6.4% in September.

In the headline annual figure, inflation in the United States rose 6.8% in the 12 months ended November against 6.2% previously. The current rate of inflation is the highest since the period ending June 1982.

Core inflation rose 4.9% over the past 12 months, for the largest increase since the 12-month period ending June 1991 and compares to 4.6% 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.

"The Fed has little choice but to accelerate tapering and prepare for the possibility of much earlier rate hikes than it was planning just a few months ago," MarketWatch quoted senior economist Sal Guatieri of BMO Capital Markets.

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 December 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.

May to November 2021 Consumer Prices – Gains & Losses in Percent

  May 2021 June 2021 July 2021 August 2021 September 2021 October 2021 November 2021 12 Month
All items 0.6 0.9 0.5 0.3 0.4 0.9 0.8 6.8
  Food 0.4 0.8 0.7 0.4 0.9 0.9 0.7 6.1
    Food at home 0.4 0.8 0.7 0.4 1.2 1.0 0.8 6.4
    Food away from home 0.6 0.7 0.8 0.4 0.5 0.8 0.6 5.8
  Energy .0 1.5 1.6 2.0 1.3 4.8 3.5 33.3
    Energy commodities -0.6 2.6 2.3 2.7 1.3 6.2 5.9 57.5
      Gasoline (all types) -0.7 2.5 2.4 2.8 1.2 6.1 6.1 58.1
      Fuel oil 2.1 2.9 0.6 -2.1 3.9 12.3 3.5 59.3
    Energy services 0.7 0.2 0.8 1.1 1.2 3.0 0.3 10.7
      Electricity 0.3 -0.3 0.4 1.0 0.8 1.8 0.3 6.5
      Utility (piped) gas service 1.7 1.7 2.2 1.6 2.7 6.6 0.6 25.1
  All items less food, energy 0.7 0.9 0.3 0.1 0.2 0.6 0.5 4.9
    Commodities less food, energy 1.8 2.2 0.5 0.3 0.2 1.0 0.9 9.4
      New vehicles 1.6 2.0 1.7 1.2 1.3 1.4 1.1 11.1
      Used cars and trucks 7.3 10.5 0.2 -1.5 -0.7 2.5 2.5 31.4
      Apparel 1.2 0.7 .0 0.4 -1.1 .0 1.3 5.0
      Medical care .0 -0.4 0.2 -0.2 0.3 0.6 0.1 0.2
    Services less energy 0.4 0.4 0.3 .0 0.2 0.4 0.4 3.4
      Shelter 0.3 0.5 0.4 0.2 0.4 0.5 0.5 3.8
      Transportation 1.5 1.5 -1.1 -2.3 -0.5 0.4 0.7 3.9
      Medical care -0.1 .0 0.3 0.3 -0.1 0.5 0.3 2.1

 

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 December and the latest annual period become public on January 12, 2022.

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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