Inflation Spiked Another 6.8% In November—Hitting 40-Year High As White House Tries To Temper Price Concerns


Consumer prices rose 6.8% in the 12 months ending in November, according to data released Friday by the Labor Department, ticking up only slightly after a massive surge in recent months but still marking the highest reading in nearly 40 years.

Gasoline prices are displayed at a Marathon station in Miami Beach, Florida.


Key Facts

Overall prices rose 0.8% from October—higher than the 0.7% economists were expecting, but down from the previous month’s increase of 0.9%.

Despite the monthly decline, prices jumped another 6.8% last month on a yearly basis, the largest annual increase since June 1982.

The overall increase was the result of broad gains across most consumer goods and services, the government said, pointing to rising prices for gasoline, shelter, food and cars as some of the largest contributors.

The decades-high inflation figure comes one day after White House economist Brian Deese sought to temper concerns about rising prices, telling reporters on Thursday that natural gas prices, which rose 0.6% last month, have fallen 25% from their average in November—a \dramatic decline\ that should improve the inflation outlook \meaningfully\’ this winter.

The core price index, which excludes volatile energy and food prices, rose 0.5% over the last month—down from 0.6% one month prior.

Key Background

Trillions of dollars in unprecedented government spending helped keep the economy afloat during the pandemic, but levels of historically high inflation have rattled the market in recent months. Bank of America and Morgan Stanley are among the Wall Street investment banks that have warned inflation—and not the pandemic—is now the biggest risk to the market. The Federal Reserve, meanwhile, has started to taper, or reduce, its accommodative monetary policy efforts in an effort to combat rising prices. In an email on Friday, market analyst Adam Crisafulli, founder of Vital Knowledge Media, said the \huge gains\ in prices \won\’t make the Fed feel great\ as it decides whether its current level of economic stimulus is appropriate in the coming months.

Crucial Quote

“Households are facing higher prices at every turn,” Bankrate Chief Financial Analyst Greg McBride said in emailed comments on Friday, pointing out prices for staples like food, energy and shelter are climbing at their quickest pace since 2007 and accounting for more than half of the overall price gains. There’s also “further evidence of inflation broadening out,” McBride added, saying household furnishings, apparel, and “the usual suspects” of new and used vehicle prices all posted “outsized” increases in November.

Further Reading

‘Meatflation’ Worsens As Prices Rise At Fastest Rate In 30 Years In October (Forbes)

The Best Investing Strategies For Inflationary Times (Forbes)

This is a developing story. Please check back for updates.