Inflation isn’t going anywhere fast — but prices certainly are. The latest Consumer Price Index for October recorded a 6.2 percent increase, year over year, according to data released Wednesday by the Bureau of Labor Statistics.
It's the largest increase in over 30 years and far outpaced economists’ expectations of a 5.9 percent spike. October's data represents a continuation of months of markedly faster rising prices, compared to levels the U.S. economy has seen in recent years.
The greatest month-to-month increases were seen in food, up 0.9 percent; energy, up 4.8 percent; and shelter rising 0.5 percent. Used cars and trucks reversed a late summer decline and rose 2.5 percent, and new vehicles notched up a 1.4 percent increase.
There were a few decreases, with airline fares falling 0.7 percent and alcoholic beverages down 0.2 percent.
“Inflation hurts Americans pocketbooks, and reversing this trend is a top priority for me," President Joe Biden said in a statement Wednesday morning.
The economy is still reeling from a consumer shift during the pandemic from services to goods, creating a global shipping crisis as the supply chain struggles to keep up and suffers its own coronavirus-related labor issues. That has created waves of increased costs up and down the supply line, and producers and retailers haven’t even passed on all of them to shoppers yet.
Consumers are starting to notice the increasing bite that rising food prices are starting to take out of their monthly budgets.
Nearly 60 percent said that grocery stores were where they saw the most dramatic price increases, according to an October survey of US consumers by Bank of America Global Research, followed by restaurants and takeout.
Sandra Cawthern is an 82-year-old retiree in Florida living solely on Social Security benefits. One of the biggest financial impacts for her from the pandemic has been the rising cost of groceries.
“Double the cost of food and more as prices continue up to triple,” she said. “One scrawny chicken wing is $1 in the eight-piece fried chicken at Publix.”
Price increases are being seen across the food aisle.
The average price for a carton of orange juice in January 2020, before the pandemic, was $3.29, according to checkout data from NielsenIQ. Now, it’s $3.53. A dozen eggs used to cost on average $2.20, but are now up to $2.52. Chicken breast has risen to $3.24 a pound from $2.99 a pound, fresh ground beef is up to $5.93 per pound, sandwich bread up from $2.44 a loaf to $2.77, and a pound of bacon up from $4.72 to a sizzling $6.45.
Loose monetary policy from the nation’s central bank and infusions of government stimulus have helped heat up prices, economists say.
But the Federal Reserve recently reiterated that it sees inflation as “transitory” and stuck to its stance to essentially let inflation catch up to a long-term average of 2 percent, which means letting it run “moderately above 2 percent for some time so that inflation averages 2 percent over time,” it said in a statement last week.
Inclement weather and shipping snarls are also contributing to the increases, experts say.
“Various agricultural commodities — wheat, sugar, beef, and corn — are up by double-digit percentages this year and due to inclement weather and import backlogs, coffee prices are up over 50 percent year-to-date,” said Greg McBride, chief financial analyst for Bankrate. “While energy prices are up due to a surge in demand, food inflation is a consequence of supply chain constraints and unfavorable weather impacting harvests.”
These price increases can be felt more acutely by those living on fixed income or public assistance, McBride said.
Price increases can be felt more acutely by those living on fixed income or public assistance.
“Households on a fixed income aren’t benefiting from wage growth, are still dealing with ultra-low-interest income, but are facing the pervasive price increases that are hitting everyone,” McBride said.
Cawthern, the retiree, said that she has little discretionary income after paying groceries and other bills.
“All I have left after my fixed expenses is $78 per week,” she said.