Americans’ cost of living is rising faster than it has for three decades, with food and fuel driving the increases.
The consumer price index for October showed a 6.2 percent increase in prices over the previous twelve months.
It represents a significant increase from September, when prices were already rising at a rate of 5.4 percent.
As the pandemic’s impact continues, inflation has become a growing concern for consumers and policymakers this year.
Price pressure has been put on by bottlenecks in the supply of some goods, combined with increased demand from customers as the vaccine programme allowed the economy to reopen.
Due to a labour shortage, employers have increased wages in some sectors, which can lead to higher prices.
Even after excluding the cost of food and fuel, which are more volatile, prices were rising rapidly at a rate of 4.6 percent.
Prices rose 0.9 percent on a monthly basis in October, after rising 0.4 percent in September, according to the US Labor Department, demonstrating the rate of acceleration.
The Federal Reserve believes that the current high rate of inflation is “transitory.” As a result, the Fed is unlikely to raise interest rates, as is customary in response to rising inflation.
Last week, however, Federal Reserve Chair Jerome Powell announced a reduction in the Fed’s bond-buying programme, the first step toward tightening monetary policy.
Some economists are warning that inflation may become more difficult to manage as the race for workers and supplies continues to put downward pressure on prices.