The Labor Department reported Wednesday that consumer prices were 6.2% higher in October than a year ago. That’s the sharpest increase since November of 1990. The U.S. inflation surged to a level not seen for more than 30 years.
The year-over-year increase in the consumer price index exceeded the 5.4% rise in September, the Labor Department reported Wednesday.
From September to October, prices jumped 0.9%, the highest month-over-month increase since June, the report added.
The increase was “broad-based, with increases in the indexes for energy, shelter, food, used cars and trucks, and new vehicles among the larger contributors”, the Labor Department said. “The energy index rose 4.8 percent over the month, as the gasoline index increased 6.1 percent and the other major energy component indexes also rose. The food index increased 0.9 percent as the index for food at home rose 1 percent.”
The index for all items less food and energy rose 0.6 percent in October after increasing 0.2 percent in September, the Labor Department said. “Most component indexes increased over the month. Along with shelter, used cars and trucks, and new vehicles, the indexes for medical care, for household furnishing and operations, and for recreation all increased in October. The indexes for airline fares and for alcoholic beverages were among the few to decline over the month.”
According to the Labor Department, the all items index rose 6.2 percent for the 12 months ending October, the largest 12-month increase since the period ending November 1990. The index for all items less food and energy rose 4.6 percent over the last 12 months, the largest 12-month increase since the period ending August 1991. The energy index rose 30.0 percent over the last 12 months, and the food index increased 5.3 percent.
Although the Federal Reserve has repeatedly insisted price pressures will prove “transitory”, financial markets were taken aback by a 6.2 percent increase in the cost of living in the world’s biggest economy over the past year, the report said.
The news came after the Biden administration and the Federal Reserve tried to downplay rising costs, arguing they are temporary phenomena driven by Covid-19’s unprecedented impact on the global supply chain.
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