The consumer price index jumped 6.2% year over year during October, the Labor Department stated. The increase was the largest yearly gain since Nov. 1990. Prices rose by 0.9% month over month.
Analysts who took a survey by Refinitiv were thinking that prices would rise by 0.6% in October and 5.8% yearly.
“Inflation is expanding,” said Greg McBride. “In addition to groceries, shelter, and energy continuing to post record monthly increases, the price tag for a new or used car is once again going into overdrive.”
Energy prices rose 4.8% in the last month, and were up by 30% over the course of 2020. The October price increase was mainly the result of a 6.1% hike in the price of gasoline.
Food costs, meanwhile, ticked up 0.9% last month as the groceries at home category saw an increase of 1%. All food costs are up by 5.3% year over year.
Core prices, which don’t include energy and food, rose 0.6% month over month and 4.6% over the past year. Economists were thinking there would be respective increases of 0.4% and 4.3%.
Also contributing to the increase were used and new car prices, which in October increased 1.4% and 2.5%, respectively. Also, Prices for new automobiles were 9.8% over levels from just a year ago, while the prices for a used vehicles were up 26.4% from October 2020.
The price of shelter inched up 0.5% last month and was 3.5% over year-ago levels.
“We are witnessing the early signs of an inflationary surge that is likely going to continue, with businesses responding to increasing input costs with raising their own prices, which in turn produces higher input prices for others,” said Brad Armstrong. “It is a cycle that just keeps on repeating itself.”
Wednesday’s statement surely captured the Federal Reserve’s attention, which earlier in the month announced their plans to cut down its $120 billion a month in asset purchases while also taking notice of higher than expected inflation levels. The central bank still thinks inflation will be “transitory.”
Author: Blake Ambrose