The core CPI reading, which strips out volatile food and energy prices, posted a 6% increase over the same period, higher than at the level of the previous month. Both readings are among the largest price jumps consumers have seen since 1981.
“Inflation is trending higher and broader with a worse outlook,” said Seung-Won Son, professor of finance and economics at Loyola Marymount University. In Los Angeles. “The probability of a recession in the next year or so is increasing. Inflation is decimating consumers’ purchasing power. Since consumer spending accounts for about 70% of the economy, a real reduction in consumer spending will deal a huge blow to the economy.”
Mark Zandi, chief economist at Moody’s Analytics, said the typical American household spends about $460 more per month than it did last year buying the same basket of goods and services.
But the rise in energy prices was not limited to record gasoline prices. Electricity prices have risen 12% over the past 12 months, the largest annual increase since 2006. The price of natural gas used by consumers is up 30.2%, the biggest jump since 2008.
Higher energy prices alone added two percentage points to the general consumer price index.
It’s not just energy that is driving prices up. The Ministry of Labor said that all the main components of the index showed an increase in prices.
prices Buying food to eat at home It rose 11.9%, the largest increase in 12 months since 1979, as eggs rose 32.2%, milk 15.9%, and poultry 16.6%.
The Shelter Index, which measures rents and other housing costs, posted a 5.5% increase, its largest gain in the 12 months since 1991. While that increase may not be as large as the double-digit price hike in other categories, the money that usually What consumers spend on their homes, whether renting or buying, is the biggest spend they spend each month.
Used car prices are on the rise again, which has shown signs of abating with monthly declines over the past three months, driving up prices by 16.1% over the past 12 months. Meanwhile, new car prices increased by 12.6% over the same period. A shortage of computer chips has curbed production at automakers, and this limited inventory is responsible for the high prices.
“Inflation is proving to be more persistent than was widely believed a year ago, when the temporary password was the buzzword,” said Jim Beard, chief investment officer at Planet Moran Financial Advisors. “The two main questions now? How far will the Fed go to hit inflation, and how far can the Fed go without pushing the economy into recession?”
And while the inflation report brought fresh attacks on the Biden administration from Republicans, the White House sought to blame the worst of inflation on high oil and gasoline prices after Russia’s invasion of Ukraine.
“Today’s inflation report confirms what Americans already know. Putin’s price hike is hitting America hard,” President Joe Biden said at the Port of Los Angeles, where he paused for a regional summit to discuss what his team considers the most pressing current issue. Price hikes on everything from gas to groceries.
Biden sought to acknowledge the pain Americans feel, explain how he was looking for a solution to it, and blame others.
“I understand,” Biden said. “Inflation is a real challenge for American families.”
He criticized conglomerates of shipping companies for raising prices and oil companies to buy back their shares, and singled out the giant oil company Exxon for making “more money from God” last year.
CNN’s Kevin Liptak contributed to this report.
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