Consumer prices soar 6.2% in October, largest jump since November 1990
Inflation reached a three-decade high, new data indicates.
Consumer prices continued to climb at an alarmingly rapid pace last month, according to data from the Labor Department on Wednesday, as inflation woes have cast a shadow over the post-pandemic economic recovery.
The Consumer Price Index, often used as an inflation barometer as it measures the prices consumers pay for everyday goods and services, jumped by a higher-than-expected 0.9% last month. It surged 6.2% since last October, the largest 12-month increase since November 1990, the government said.
The so-called "core index," or measure for all items except the more volatile food and energy indices, rose 4.6% over the last 12 months. This represents the largest one-year increase since August 1991, the Labor Department said. In October alone, the core index climbed 0.6% after a 0.2% increase in September.
The energy index climbed by some 4.8% last month alone and the gasoline index gained 6.1%. This marks the fifth consecutive monthly increase in gasoline prices.
Increases in consumer prices were seen broadly across many of the indices, the DOL said, with sharp spikes in prices for energy, shelter, food, used cars and trucks. New vehicles were among the largest contributors to the overall price hikes.
The indices for airline fares and alcoholic beverages saw a decline last month, the DOL said.
The price increases have been linked to rebounding consumer demand for goods and services as the pandemic wanes, economists have said. Meanwhile, lingering supply chain issues and an apparent shortage of workers accepting low-wage jobs have exacerbated the mounting inflation fears among policymakers.
While some had hopes the inflation data seen in recent months reflected a temporary blip, the fresh data released Wednesday likely fuels further concerns about inflation's grip on the economy going forward. Many are now looking at how the Federal Reserve will respond to the latest indicators as it plans to start rolling back on pandemic measures meant to buoy the economy during the health crisis.
President Joe Biden reacted to the new economic data in a statement Wednesday morning, saying that addressing inflation was a "top priority" for his administration and touting his Build Back Better plan as a way to ameliorate the economic pain it causes.
"Inflation hurts Americans pocketbooks, and reversing this trend is a top priority for me," the president said, noting the largest share of the increase in prices in the report is due to rising energy costs.
Biden said he has directed his National Economic Council "to pursue means to try to further reduce these costs, and have asked the Federal Trade Commission to strike back at any market manipulation or price gouging in this sector."
"Other price increases reflect the ongoing struggle to restore smooth operations in the economy in the restart: I am traveling to Baltimore today to highlight how my Infrastructure Bill will bring down these costs, reduce these bottlenecks, and make goods more available and less costly," he added. "And I want to reemphasize my commitment to the independence of the federal reserve to monitor inflation, and take steps necessary to combat it."
Biden said more than a dozen Nobel Prize-winning economists "have said that my plan will 'ease inflationary pressures," adding that it does this "without raising taxes on those making less than $400,000 or adding to the federal debt, by requiring the wealthiest and big corporations to start to pay their fair share in taxes."
"We are making progress on our recovery. Jobs are up, wages are up, home values are up, personal debt is down, and unemployment is down," the president said. "We have more work to do, but there is no question that the economy continues to recover and is in much better shape today than it was a year ago."