The Consumer Price Index for All Urban Consumers increased .8% in November the Bureau of Labor Statistics announced today. This means over the last 12 months, the all items index increased 6.8%, just shy of a decade-record 7% before seasonal adjustment.
The Bureau states that the jump was the result of broad increases in almost all component indexes; gasoline, shelter, food, used cars and trucks, and new vehicles were among the sectors that largely contributed to the increases.
The energy index rose 3.5% in November, largely driven by an increase in gasoline which shot up 6.1%, in addition to the other major energy component indexes rising as well.
The food index, another major contributor to unrelenting price surges over the past year, also did not give up. The food index added almost another entire percentage point, increasing .7% as the index for food at home rose .8%.
The 6.8% overall increase in the all items index represents the largest 12-month increase since 1982. The index for all items less food and energy rose 4.9% over the last 12 months, still significantly higher than the near-zero inflation privileged over the past decade.
Prices across all sectors have been under pressure from rising supply chain disruptions affecting most major markets worldwide as a result of COVID lockdowns and sky-high demand. One of the more constricting problems for supply chains has been the sudden uptick in demand all at once as vaccine rates jumped and companies that were backlogged with orders were not able to fill them quick enough.
This has created a confluence of rising prices, but without pushback from consumers.
President and GM of NCR Retail David Wilkinson said in a conversation with GOBankingRates, “Inflation won’t be addressed until the supply chain issues improve and there’s some action taken by the Fed. What’s interesting is that rising inflation hasn’t caused a reduction in spending. Consumers are showing more resilience there and that they’re not as price-sensitive as we expected. They’re often buying now at closer to full price, not having to get a discount or coupon to shop which is good news for retailers, who want to protect their margins.”
While recent job reports have shown signs of recovery, the threat of the new Omicron variant has left some investors skittish. News of the new coronavirus variant sent markets tumbling in recent weeks signaling that full liftoff might not happen for another couple of quarters.
“No one knows exactly what will happen with Omicron, but economic shutdowns appear unlikely. What is clear is people realize we are not in 2020, and things have progressed significantly toward a recovery, although an imperfect one. I believe consumer spending will remain strong in the first half of 2022, and while it is natural to expect setbacks along the way, this is our new normal and people are ready to start figuring out how to begin to live fully again in this new reality” Wilkinson added.
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