According to Labor Department data released on Wednesday, consumer prices continued to rise at an alarmingly quick pace last month, casting a pall over the post-pandemic economic recovery.
Last month, the Consumer Price Index, which gauges the prices consumers pay for common goods and services and is typically cited as an inflation barometer, increased by a higher-than-expected 0.9 percent. According to the government, it has increased by 6.2 percent since last October, the greatest 12-month gain since November 1990.
Over the last 12 months, the so-called “core index,” which includes all items except the more volatile food and energy indexes, has risen 4.6 percent. According to the Labor Department, this is the greatest one-year gain since August 1991. After a 0.2 percent increase in September, the core index rose 0.6 percent in October.
Last month, the energy index increased by 4.8 percent, while the gasoline index increased by 6.1 percent. This is the fifth month in a row that gasoline prices have risen.
Consumer prices rose across the board, according to the DOL, with strong increases in the prices of energy, lodging, food, and used automobiles and trucks. The most significant contributors to the overall price increases were new autos.
The DOL reported that the indices for airline prices and alcoholic beverages both fell last month.
According to analysts, the price hikes are connected to a comeback in consumer demand for products and services as the pandemic fades. Meanwhile, ongoing supply chain challenges and an apparent shortage of individuals willing to accept low-wage employment have heightened officials’ concerns about inflation.
While some hoped that previous inflation data was merely a hiccup, the new data presented on Wednesday is likely to raise further concerns about inflation’s grip on the economy in the future. Many are now watching to see how the Federal Reserve will react to the recent data, as it prepares to begin withdrawing policy measures designed to boost the economy amid the health-care crisis.
President Joe Biden issued a statement Wednesday morning in response to the fresh economic figures, calling inflation a “top priority” for his government and promoting his Build Back Better plan as a way to alleviate the economic hardship it creates.
“Inflation hurts Americans’ wallets, and reversing this trend is a top priority for me,” the president said, noting that rising energy costs account for the majority of the price increases in the report.
“I have encouraged the Federal Trade Commission to hit back at any market manipulation or price gouging in this sector,” Biden said, adding that he has authorised his National Economic Council “to pursue methods to attempt to further decrease these prices.”
“Other price rises reflect the ongoing work to restore smooth operations in the economy in the restart: I’m coming to Baltimore today to illustrate how my Infrastructure Bill can cut these expenses, reduce bottlenecks, and make things more available and less expensive,” he continued. “I also want to reaffirm my commitment to the federal reserve’s independence in monitoring inflation and taking the necessary steps to combat it.”
“My plan will reduce inflationary pressures,” Biden stated, adding that it accomplishes so “without raising taxes on people making less than $400,000 or adding to the federal debt, by asking the wealthiest and major corporations to start paying their fair share of taxes.”
“Our rehabilitation is coming along nicely. Jobs are increasing, incomes are increasing, property prices are increasing, personal debt is decreasing, and unemployment is decreasing “declared the president. “There is still work to be done, but there is no doubt that the economy is improving and is far better off now than it was a year ago.”
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