(12 December 2021) In November, U.S. consumer price inflation, a measure of the cost of a wide-ranging basket of consumer goods and services, hit its highest year-over-year growth in four decades. Inflation continues to put pressure on households and businesses.

The consumer price index was up 6.8% year-over-year in November, largely driven by food, energy and housing prices. Core inflation, which excludes volatile categories such as food and energy, climbed 4.9%, the highest jump since 1991.

  • Food prices were up 6.1% in November, while housing rose 4.8% as disruption in the supply of raw materials limited construction activities.
  • Energy price were up 33.3% in November following a 30% increase in October. Gasoline prices were up a staggering 58.1% year-over-year in November.

In recent months, high inflation resulting from the pandemic has been spurred by disruption in global supply chains as well as by strong demand resulting from stimulus packages.

The persistently elevated inflation has raised concern among Federal Reserve policy makers. The uptick has lasted longer than expected, and it is showing no sign of cooling down as demand for products remains strong and fear of the new Omicron variant continues to disrupt manufacturing and transportation. If the Fed regards inflation as permanent rather than transitory, it is likely to cut back support for the economy by slowing down monthly bond purchases, and eventually by raising interest rates — likely sooner than they had previously expected.

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