Consumer prices are continuing to climb, causing new pain for Americans' pocketbooks, as inflation tightens its grip on the economy and hobbles the post-pandemic recovery.
The consumer price index, which measures the prices consumers pay for a market basket of everyday goods and services, jumped 0.8% last month after rising 0.9% in October, the Department of Labor reported Friday. Over the last 12 months, the index climbed some 6.8% before seasonal adjustment. This marks the largest 12-month increase in nearly 40 years.
While inflation is already wreaking havoc on holiday shopping, it's especially painful for households with limited means to absorb higher prices for essentials. Policymakers including Federal Reserve Chair Jerome Powell in recent weeks have also began walking back on assurances that it was likely a temporary, post-pandemic blip.
The so-called core index, a measure of all prices less the more volatile food and energy indices, rose 0.5% in November, building on a 0.6% increase in October. The core index climbed 4.9% over the last 12 months, the DOL said.
"Inflation is outpacing increases in household income and weighing heavily on consumer confidence, which is at a decade low," Greg McBride, the chief financial analyst at Bankrate, said in a commentary to ABC News shortly after the data was released Friday. "It is only a matter of time before it impacts consumer spending in a material way."
The energy index rose 33.3% over the last year after climbing 3.5% in November alone.
The food index jumped 6.1% over the last year and soared 0.7% in November.
The changes in the food and energy index mark the largest 12-month increase in at least 13 years, the DOL said.
Some of the largest contributors to soaring prices were increases in prices for gasoline, shelter, food, used and new vehicles and trucks.
President Joe Biden reacted to the report in a statement Friday, acknowledging that "prices are rising," but noted that the data was collected earlier in the month of November, adding that "developments in the weeks after these data were collected last month show that price and cost increase are slowing, although not as quickly as we'd like."
"Half of the price increases in this report are in cars and energy costs from November," the president said. "Since then, we have seen significant energy price reductions." He also noted that in recent weeks used car prices have trended downward in the wholesale market "which should translate into lower prices for Americans in the months ahead." "Even with this progress, price increases continue to squeeze family budgets," Biden added. "We are making progress on pandemic-related challenges to our supply chain which make it more expensive to get goods on shelves, and I expect more progress on that in the weeks ahead."
The president said that the challenge of rising prices underscores the importance of Congress passing his Build Back Better plan, which he said will help families by reducing how much they pay for health care, prescription drugs and child care.
Economists have attributed the rapidly climbing prices to supply-demand imbalances lingering from the pandemic shock to the economy, as labor shortages and supply chains issues result in supply not being able to keep up with the post-pandemic consumer demand for goods and services.
The painful price rises also are coming as many Americans prepare to celebrate the holidays with family and friends for the first time since a COVID-19 vaccine rolled out.