The Labor Department said the consumer-price index—which measures what consumers pay for goods and services—rose 6.8% in November from the same month a year ago. That was the fastest pace since 1982 and the sixth straight month in which inflation topped 5%.
The so-called core price index, which excludes the often-volatile categories of food and energy, climbed 4.9% in November from a year earlier. That was a sharper increase than October’s 4.6% rise, and the highest rate since 1991.
The increase in prices for new vehicles, which came in at 11.1% in November, was the largest on record, as were those for men’s apparel and living room, kitchen and dining room furniture. A 7.9% surge in fast-food restaurant prices last month marked the sharpest on record too.
The steady rise in restaurant prices during the past few months is a sign of pass-through from wages into higher prices, economists say. That dynamic is increasingly showing up in other industries. Wages tracked by the Atlanta Fed climbed 4.3% in November, up from 4.1% in October and the highest since 2007.
Some energy prices showed signs of easing—in part because of fear in the financial markets that the Omicron variant of Covid-19 could slow growth. But gasoline rose at a 6.1% monthly rate for the second straight month.
The November prices trend came before the emergence of the Omicron variant, which poses a new threat from a pandemic that is well into its second year. But the sharp price increases are the result of a booming economy that has developed imbalances in supply and demand as the U.S. continues to recover from the pandemic.
“We have tremendous spending by consumers. A lot of people are getting hired. Demand is huge,” Allen Sinai, chief global economist and strategist at Decision Economics, Inc. said. He added that higher-than-expected inflation implies a needed pullback in fiscal and monetary stimulus. “Even after doing that, the economy should still be in super shape producing growth rates and earnings not seen in decades.”
On a monthly basis, the CPI increased a seasonally adjusted 0.8% in November from the prior month, about the same as October’s 0.9% increase.
The latest strong inflation report strengthens the case for Federal Reserve officials to commit to hastening the wind-down of their stimulus efforts, paving the way to raise interest rates in the spring to curb inflation.