Consumer prices jumped 7% in December from the prior year. That’s the highest inflation rate recorded since 1982. Data indicates that on a monthly basis the CPI increased 0.5%. In other news, Americans think this higher inflation will stick around for a bit. According to the most recent survey of consumer expectations by the Federal Reserve Bank of New York, 6% inflation is expected one year from now, while 4% is expected in 2025.

 

Associated Press/Christopher Rugaber
US consumer prices soared 7% in past year, most since 1982

Prices paid by U.S. consumers jumped 7% in December from a year earlier, the highest inflation rate since 1982 and the latest evidence that rising costs for food, rent and other necessities are heightening the financial pressures on America’s households.

Inflation has spiked during the recovery from the pandemic recession as Americans have ramped up spending on goods such as cars, furniture and appliances. Those increased purchases have clogged ports and warehouses and exacerbated supply shortages of semiconductors and other parts. Gas prices have also surged, in part because Americans have driven more in recent months after having cut back on travel and commuting earlier in the pandemic.

Rising prices have wiped out the healthy pay increases that many Americans have been receiving, making it harder for households, especially lower-income families, to afford basic expenses. Poll show that inflation has started displacing even the coronavirus as a public concern, making clear the political threat it poses to President Joe Biden and congressional Democrats.

You can read the entire article, here.

 

Kitco News/Neils Christensen
Gold prices holding above $1,800 but sees little traction as U.C. CPI rises 7% in December

Gold prices are holding gains above $1,800 but are struggling to gain some bullish traction as consumer price pressures rise more than expected in December.

Wednesday, the U.S. Labor Department said its U.S. Consumer Price Index rose 0.5% in last month, after a 0.8% rise in November. The data beat consensus forecasts as economists were forecasting a 0.4% rise.

For the year, the report said that headline inflation rose 7.0%. Annual inflation rose in line with expectations. The report said that inflation is at its highest level since June 1982.

Meanwhile, core CPI, which strips out food and energy costs, increased 0.6% in December, up from a 0.5% increase in November. Economists were expecting to see an increase of 0.5%.

Read the full story, here.

 

CNN Business/Julia Horowitz
The big test for inflation is 12 months away

Annual consumer inflation in the United States has climbed to 7% as prices rise at the fastest clip in nearly four decades.

But the real test for prices is a year away.

What’s happening: According to the most recent survey of consumer expectations by the Federal Reserve Bank of New York, which was published earlier this week, Americans expect inflation of 6% one year from now and 4% in three years’ time.

That’s much higher than forecasts from the Federal Reserve. The central bank projected at its December meeting that inflation would run at 2.6% in 2022.

You can read the full story, here.

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