Consumer prices rose by 6.8 percent in November over the previous year, the highest annual inflation rate since June 1982, according to the latest Consumer Price Index data from the Bureau of Labor Statistics, released Friday.
The figure exceeds the 6.2 percent year-over-year figure from October.
The greatest increases were seen in gasoline, up 6.1 percent; shelter, up 0.5 percent; food, up 0.7 percent; used cars and trucks, up 2.5 percent; and new vehicles, up 1.1 percent.
Rents also rose by 0.4 percent; and meat, poultry, fish and eggs were up by 0.9 percent. Pork prices rose especially sharply, up 2.2 percent.
"Today’s numbers reflect the pressures that economies around the world are facing as we emerge from a global pandemic — prices are rising," President Joe Biden said Friday in a statement. He noted that developments in the weeks since the data was collected "show that price and cost increase are slowing, although not as quickly as we’d like."
Volatile energy prices, supply chain snarls, high consumer demand, and loose monetary policy are all contributing to the run-up.
Increased demand, coupled with shaky supplies tends to drive up prices: Total spending by all consumers is up nearly 25 percent as of November, compared to January 2020, according to research at the nonprofit Opportunity Insights.
“Inflation matters very much for those at the lower ends of the income and wealth spectrums,” said Mark Hamrick, senior economic analyst for Bankrate. “It is a kind of double blow to lower income households, which suffered from the short but dramatic recession as the pandemic began, serving to exacerbate both wealth and income inequality.”
Stimulus checks, along with expanded pandemic relief and emergency unemployment benefits provided some buffer for families amid rising prices, but those programs have expired.
“Americans have more money in their pockets than this time last year — $100 more each month than last year — even after accounting for price increases," Biden said Friday.
The expanded child tax credit is set to end in January, which means one of the last pieces of fiscal support is falling away.
Signed into law under the American Rescue Plan, the Child Tax Credit has, since July, provided up to $300 a month to families for each child in the household. It is essentially an advance on the credit that taxpayers would normally claim on their returns, but has provided an extra lifeline to families, especially those struggling to afford child care as pandemic economic impacts have continued into the fall and winter.
The IRS has told lawmakers they must pass an extension by Dec. 28 or payments starting in mid-January could be at risk.
Even with the extra money, some households are still under pressure, and they’re not sure what they’ll do without it, especially as inflation continues to push up the prices of things they already cannot afford.
“We’ve been using it to try to make ends meet, but really [the child tax credit] just been almost keeping us afloat,” said Haley Seehaver, 25, mother of two from Williamson County, Texas. She has a degree in neuroscience but couldn’t find affordable child care and took a job at her kids’ school to get discounted day care.
“We moved here from the West Coast after we were priced out of the housing market and unable to put a roof over our family’s head. Now we are facing eviction here too because costs are rising so fast. We haven’t been able to get a handle on bills and debt.”
Her husband starts a new job in Texas at a Tesla plant next week, but to reduce costs, she and her children are moving in with her parents in Washington state. Increasing food prices have been a burden on their household budget.
“The food we want is a thing of the past,” said Seehaver. “Dinners are now mostly planned around what we can get from the food bank.”
The food we want is a thing of the past. Dinners are now mostly planned around what we can get from the food bank.
Families say they’ve seen the price of basic essentials jump considerably in the past few months. They always knew the tax credit was a temporary help and have had to take other measures to make up for the shortfall.
“The child tax credit has been a great monthly bonus but we never counted it as a solid income or something to count on,” said Allyca Dockery, mother of two from Red Bluff, California.
“In the last three months our monthly spending has doubled. We have two children, ages 12 months and an 8-year-old. Diapers went from $60 a month now to $120. Gas is beyond ridiculous. We used to drive our oldest to school. Now she catches the bus to save those extra bucks. Even ground beef that was $9.98 is now $14.89.”
Her husband recently took a new job two hours away. The travel will be a strain on the family but it’s a step they have to take.
“No one is ever happy about the inflation in essential items. We weren’t fully prepared to see our essential food and home needs double, but we are making it work,” Dockery said. “I hope things get better, but the way things are I doubt it.”
Families with primary earners in industries hit hard by the pandemic have already cut their budgets to account for reduced income and rising prices. They’re not sure where else they can tighten their belts.
Rolonda Blakely is a travel consultant from Sacramento, California, who saw her income drop when the pandemic took a bite out of flight and accommodation booking. She has been trying to scrape by on unemployment benefits but finds it hard to meal plan for herself and her young son.
“$200 in groceries doesn’t go as far as it used to eight months ago,” Blakely said. “We’ve cut back so much, I don’t know how else to reduce expenses. We’re really fearful about what’s next.”
Some households also have members who have increased health risks from underlying conditions so they cannot take employment and benefit from some of the rising wage gains that would offset inflation.
Megan Caires, 31, has Type 1 diabetes and was formerly employed in an assisted living home. Now she stays home and homeschools her second grader, taking care of her 18-month old while her husband works. “The child tax credit helped make up some of the money that I was bringing in before I had to quit my job due to the pandemic,” Caires said.
“With the rising prices of literally everything it’s made it extremely hard to be a one-income household and it puts families that are high risk like myself in a tough position,” she said.
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Consumer prices rose by 6.8 percent in November, as inflation hits highest pace since 1982 - NBC News
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