Inflation Soars to Highest Level Since 1982

By Published on January 12, 2022

The Consumer Price Index (CPI) increased 0.5% in December, bringing the key inflation indicator’s year-over-year increase to 7%, the U.S. Bureau of Labor Statistics (BLS) reported.

The CPI soared to 7% on a year-over-year basis in December, the highest level in almost four decades, the BLS reported Wednesday. Economists surveyed by The Wall Street Journal projected the index would soar past 7.1% in December.

“There’s still a lot of scarcity in the economy. Consumers and businesses are in great financial shape, and they’re willing to pay up for more goods, more services and more labor,” Sarah House, director, and senior economist at Wells Fargo, told the WSJ.

The core price index, which measures inflation of goods less food and energy, increased 0.6% in December, an increase from November’s 0.5% figure, the BLS reported. Food prices grew 6.3% on a year-over-year basis and energy prices soared 29.3% over the last year.

“It’s still hot, hot, hot, and it’s important because we’re now where the Fed worries about that 7% number getting baked into wages and getting more entrenched,” Diane Swonk, chief economist at Grant Thorton, told CNBC. “You’ve got the Fed in panic instead of patient mode, so the risk is overshooting … We’re now in a position of the Fed chasing instead of anticipating. It’s worrisome.”

Please Support The Stream: Equipping Christians to Think Clearly About the Political, Economic, and Moral Issues of Our Day.

Federal Reserve Chairman Jerome Powell said Tuesday during his confirmation hearing that the U.S. economy is strong enough to begin a tighter monetary policy, including increasing interest rates and ending its monthly asset purchases, CNBC reported.

“As we move through this year … if things develop as expected, we’ll be normalizing policy, meaning we’re going to end our asset purchases in March, meaning we’ll be raising rates over the course of the year,” Powell said in the hearing, according to CNBC. “At some point perhaps later this year we will start to allow the balance sheet to run off, and that’s just the road to normalizing policy.”

Meanwhile, the U.S. recorded an increase of just 199,000 jobs in December, far below experts’ prediction of around 422,000. Unemployment dipped to 3.9% in December from November’s 4.1% figure.

 

Copyright 2022 The Daily Caller News Foundation

 Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact [email protected]

Print Friendly, PDF & Email

Like the article? Share it with your friends! And use our social media pages to join or start the conversation! Find us on Facebook, Twitter, Parler, Instagram, MeWe and Gab.

Inspiration
Power as Power is Needed
Lee Strobel
More from The Stream
Connect with Us