Inflation in the United States reached a new record high in November, reaching 6.8 percent annually. This is the highest price increase recorded in the last 4 decades.
According to the Labor Department, the consumer price index, which covers everything consumers pay for goods and services, rose 6.8 percent in November from a year earlier. That was the fastest 12-month pace since 1982 and the sixth consecutive month of inflation above 5 percent, NewsMax reported.
There is great uncertainty as to how the markets will react to this announcement, which, although expected, is of concern to both investors and the traders and consumers who are primarily affected.
On a monthly basis, the Consumer Price Index (CPI) rose a seasonally adjusted 0.8 percent in November from the previous month. That compares with a monthly increase of 0.9 percent in October. Underlying prices rose 0.5 percent compared to October.
Inflation significantly increased the pressure on consumers, especially lower-income households who suffer from price increases in the most basic daily necessities, diminishing in real terms their purchasing power.
It has also hurt higher wages and complicated the Federal Reserve’s plans to reduce its support for the economy, which coincided with the weakening of public support for President Joe Biden.
Now, the question on many people’s minds is: Why inflation?
The sustained rise in prices has been a combination of factors resulting from the rapid rebound of the pandemic recession fueled by an avalanche of government stimulus, ultra-low rates, and a severe supply shortage in the U.S. and foreign factories.
It was also compounded by a severe shortage of workers, as millions preferred for months to live on pandemic government handouts rather than earn their income by working.
This caused employers to raise wages and then raise the prices of their products or services to compensate for their new cost structure.
As a result, prices have increased on almost all items that affect citizens. The products that have seen the most increases range from food and used vehicles to electronics, home furnishings, and rental cars.
The fast-food industry, which is highly developed in the U.S., was listed as the sector that has suffered the most from inflation.
Prices at fast-food restaurants rose one percent in November compared to October, a big monthly jump that followed months of unusually high price hikes, Brietbart reported.
Compared with a year ago, prices rose 7.9 percent. That’s by far the largest annual increase in fast-food prices in records going back to the late 1990s.
Not only have foods from fast food stands increased in price, but the price of food eaten at home is also up 6.4 percent, the most since the fall and winter of 2008. Therefore, even eating at home will be more expensive.
While some economists predict that November was the peak of inflation and should now start to come down, the reality is that nothing is certain and for now an atmosphere of deep uncertainty prevails in the markets.