The U.S. Labor Department reported Wednesday that consumer prices rose 7 percent in December from a year earlier. That’s the biggest leap since 1982. The highest price spikes were for cars, gasoline, food, and furniture as Americans ramped up spending and worker and material shortages squeezed supply chains. Used car prices soared more than 37 percent over the past year due to semiconductor shortages, and new car prices jumped nearly 12 percent. Although gasoline prices fell 0.5 percent in December, the national average of $3.30 per gallon is still 50 percent higher than the average a year ago.
Is there an end in sight? Some economists believe prices may settle down as snags in the supply chain ease, but most say inflation will remain elevated throughout this year. Rising prices have wiped out the pay increases that many Americans received in recent months. A recent Associated Press/NORC poll found that 68 percent of Americans now see the economy as a bigger concern than the pandemic. The Labor Department report ramps up pressure on President Joe Biden and the Federal Reserve to resolve inflation issues. Economists think it unlikely the Fed will reach its long-term goal to reduce inflation to 2 percent per year.
OVERVIEW
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