U.S. consumer inflation up 6.8% in past year, most since 1982
Prices for U.S. consumers jumped 6.8% in November compared with a year earlier as surging costs for food, energy, housing, autos and clothing left Americans enduring their highest annual inflation rate in 39 years.
The Labor Department also reported Friday that prices rose 0.8% from October to November — a substantial increase, though slightly less than 0.9% increase from September to October.
Inflation has been inflicting a heavy burden on consumers, especially lower-income households and particularly for everyday necessities. It has also negated the higher wages many workers have received, complicated the Federal Reserve’s plans to reduce its aid for the economy and coincided with flagging public support for President Joe Biden, who has been taking steps to try to ease inflation pressures.
Fueling the inflation has been a mix of factors resulting from the swift rebound from the pandemic recession: A flood of government stimulus, ultra-low rates engineered by the Fed and supply shortages at factories. Manufacturers have been slowed by heavier-than-expected customer demand, COVID-related shutdowns and overwhelmed ports and freight yards.
Employers, struggling with worker shortages, have also been raising pay, and many of them have boosted prices to offset their higher labor costs, thereby adding to inflation.
The result has been price spikes for goods ranging from food and used vehicles to electronics, household furnishings and rental cars. The average price of a used vehicle rocketed nearly 28% from November 2020 to last month — to a record $29,011, according to data compiled by Edmunds.com.
The acceleration of prices, which began once the pandemic hit as Americans stuck at home flooded factories with orders for goods, has spread to services, from apartment rents and restaurant meals to medical services and entertainment. Even some retailers that built their businesses around the allure of ultra-low prices have begun boosting them.
Over the past 12 months, the costs paid by a typical American family have surged by roughly $4,000, according to calculations
by Jason Furman, a Harvard economist and former Obama White House aide.
In a statement Friday, Biden said more could be done if Congress passed his sweeping social spending and climate package, which is intended to reduce household costs for health care, prescription drugs and child care.
“We have to get prices and costs down before consumers will feel confident in that recovery,” the president said. “That is the top goal of my administration.”
Though Americans’ overall income has also increased since the pandemic, a new poll found that far more people are noticing higher inflation than higher wages. Two-thirds say their household costs have risen since the pandemic, compared with only about a quarter who say their incomes have increased, according to the poll by The Associated
Press-NORC Center for Public Affairs Research.
Among them is Karyn Dixon, who received a raise this year that hasn’t come close to covering her higher expenses. Dixon, 55, works as a materials handler at a warehouse near her home not far from Knoxville, Tennessee.
Like many companies at a time when some worry about their workers leaving for higher wages elsewhere, her employer raised pay — in her case by $1.75 an hour. Yet that’d hardly enough to keep pace with higher health insurance costs and costlier food and gas.
Pricier gas “puts a damper on things, especially when you live in a rural area,” Dixon said. “If we need anything important, we have to travel to the next town over, or Knoxville. Our options are limited.”
“There really hasn’t been much of a benefit from it,” she said of the raise. “You make the extra money, but you turn around and have to pay more for food and gas, just so you can get to work.”
Outside the U.S., too, surging inflation is squeezing households and businesses. In Europe, energy costs have driven up consumer prices to the highest level since the euro launched more than 20 years ago. Annual inflation in the 19 countries that use the euro hit 4.9% in November, according to the European Union’s statistics agency. Inflation has gone much higher in some other European countries, with Poland close to 8%, Lithuania above 9% and Turkey at an eye-popping 21%.