Record Four Decade High for U.S. Inflation

By: Tomas Ronolski - AllPennyStocks.com News

Friday, December 10, 2021

U.S. consumer prices reached a staggering 39-year high in November, as the consumer price index — the CPI — reacted to strong consumer demand and supply constraints.

The index increased 6.8 percent year over year, and was up 0.8 percent in November. Prices for food, gasoline, food and automobiles — both new and used — were among the highest.

The monthly print from the U.S. Bureau of Labor Statistics measures the average change over time in an array of goods from rent to food to gasoline.

The print has been trending higher over the last several months, however, the Federal Reserve’s reaction at its meeting next week will be closely watched. The central bank has indicated that inflation may no longer be transitory and tapering might begin sooner than anticipated.

In addition to tapering bond purchases —which the Fed is currently buying $120 billion per month — interest rate hikes are being priced in for the second quarter of 2022. Concerns are being raised that inflation numbers above consensus may push the central bank to hike rates sooner.

The current recovery has no precedent, driven by strong consumer demand and record stimulus. If supply-chain issues improve, inflationary pressures could start to ease in early 2022.

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