Inflation Jumps 5.7% In November To Highest Level Seen Since 1982

Rising prices in the U.S. hit another dour milestone on Thursday with core inflation reaching 5.7% in the last year. This is the highest reading since 1982 and a sign that inflation woes will extend into 2022.

When more volatile food and energy prices are excluded, the figure is smaller, but still at around 4% higher than last year.

The monthly Personal Consumption Expenditures (PCE) data in November rose 0.6% for core inflation and 0.5% after food and energy prices were excluded.

Throughout 2021 prices for many goods have spiked as a result of the COVID-19 pandemic, global supply chain bottlenecks, a nationwide labor shortage and an explosion in demand after the easing of public health restrictions from 2020.

The PCE reading is important to consider as the Federal Reserve begins to move in a more hawkish direction on inflation. On Dec. 15, the Fed announced that it would speed up its tapering of its monthly stimulus purchases and aim to initiate three targeted interest-rate hikes in 2022.

As the Fed’s preferred metric for understanding inflation, the PCE data are likely to reinforce the central bank’s posture for the new year.