Heavy burden for consumers as holidays near: Soaring prices

WASHINGTON » A worsening surge of inflation for such bedrock necessities as food, rent, autos and heating oil is setting Americans up for a financially difficult Thanksgiving and holiday shopping season.

Prices for U.S. consumers jumped 6.2% in October compared with a year earlier, leaving families facing their highest inflation rate since 1990, the Labor Department said Wednesday. From September to October, prices jumped 0.9%.

Inflation is eroding the strong gains in wages and salaries that have flowed to America’s workers in recent months, creating a political threat to the Biden administration and congressional Democrats and intensifying pressure on the Federal Reserve as it considers how fast to withdraw its efforts to boost the economy.

Fueling the spike in prices has been robust consumer demand, which has run into supply shortages from COVID-related factory shutdowns in overseas manufacturers. America’s employers, facing worker shortages, have also been handing out sizable pay raises, and many of them have raised prices to offset those higher labor costs.

The accelerating price increases have fallen disproportionately on lowerearning households, which spend a significant portion of their incomes on food, rent, and gas. Millions of households that are planning travel, Thanksgiving dinners and holiday giftgiving will be forced to pay much more this year.

The jump in inflation is not confined to the U.S. Prices have been accelerating in Europe and elsewhere, with annual inflation in the 19 countries that use the euro currency exceeding 4% in October, and energy prices spiking 23%.

Americans are now spending 15% more on goods than before the pandemic. Ports, trucking companies and railroads can’t keep up, and the resulting bottlenecks are swelling prices.