Inflation is hot, hot, hot.
The Consumer Price Index soared 6.2 percent in October from a year ago, the biggest jump since 1990 and higher than economists had forecast, the Labor Department said Wednesday. Compared with last month, prices rose 0.9 percent, more than double the rate seen in September.
There are several factors driving the scorching increases. Prices fell dramatically last year during the pandemic, so some of the gains are coming off depressed bases. Consumer demand is very strong, thanks to elevated savings and government stimulus payments. And supply chain disruptions are leading to product shortages and price hikes.
The big culprits are energy, up 30 percent over last year, and food, up 5.3 percent. Excluding those items, which are subject to frequent price swings, inflation was running at an annual rate of 4.6 percent last month, the fastest since 1991.
Of course, we all need to eat, and gasoline and heat, well, you can’t skip them until prices come down.
Here are some of the biggest year-over-year gains from Wednesday’s report:
- Unleaded regular gasoline: 50 percent
- Car/truck rentals: 39 percent
- Utility gas service: 28 percent
- Used cars/trucks: 26 percent
- Beef/veal/bacon: 20 percent
- Washers/dryers: 15 percent
- Eggs: 12 percent
- Bedroom furniture: 12 percent
- Fresh fish/seafood: 11 percent
- Televisions: 10 percent
- Peanut butter: 6 percent
The Federal Reserve said last week that inflation is being fueled by temporary forces (see above) that will likely retreat next year. The central bank wants to hold off raising rates, a tool to keep prices in check, in the hopes that unemployment will fall further.
With Wednesday’s report, the waiting game just got more nerve-wracking.