Consumer prices rose to 6.2% in the year ending October, the Department of Labor reported Wednesday, the highest rate of inflation in 30 years.
The numbers from the consumer price index came in above expectations of 5.8% and will add to widespread fears about inflation. Many economists have worried that inflation could be coming in too hot as the country recovers from the pandemic, federal spending remains high, and the Federal Reserve maintains a low interest rate target. Public worries about high prices pose a major threat to President Joe Biden’s popularity.
“Inflation hurts Americans pocketbooks, and reversing this trend is a top priority for me,” Biden said in a statement following the report.
“No matter how squishy the definition of ‘transitory’ might be, it is undeniable that inflation is a problem,” said Greg McBride, the chief financial analyst for Bankrate.
“Consumers are feeling it in the pocketbook at the gas pump, grocery store, and tenants in many parts of the country could get sticker shock at their next lease renewal,” he said.
The Wednesday report was much anticipated in light of stubbornly higher prices.
INFLATION EXPECTATIONS AT RECORD LEVEL AS COUNTRY GRAPPLES WITH HIGHER PRICES
While the Fed has consistently said that it expects the too-high inflation to be transitory, some economists fear that higher prices might not just sink away. During its most recent meeting, the Fed’s monetary policy committee upped its predictions for this year’s inflation to 4.2%, compared to its June forecast of 3.4%. The central bank expects prices to settle down to 2.2% next year.
The Federal Reserve Bank of New York released a report this week that found that short-term inflation expectations are at their highest levels since it began surveying consumers in 2013.
Inflation is a major concern for the economy, although unemployment has also been a worry.
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While the economy added 531,000 new jobs in October, more than expected, the United States is still millions of jobs short of where it was prior to the COVID-19 pandemic when unemployment was at a record 3.5%.
