U.S. Inflation Rate Highest In 31 Years

Inflation is starting to look like that unexpected — and unwanted — houseguest who just won’t leave, Paul Wiseman reported for the Associated Press (AP).

Photo Insert: Inflation is, in all senses of the word, making it significantly harder for Americans to "bring home the bacon" as the price of the aforementioned has risen 20%.

For months, many economists had sounded a reassuring message that a spike in consumer prices, something that had been missing in action in the US for a generation, wouldn’t stay long.

It would prove “transitory,” in the soothing words of Federal Reserve Chair Jerome Powell and White House officials, as the economy shifted from virus-related chaos to something closer to normalcy.

Yet as any American who has bought a carton of milk, a gallon of gas, or a used car could tell you, inflation has settled in. And economists are now voicing a more discouraging message: Higher prices will likely last well into next year, if not beyond. On Wednesday, the government said its consumer price index soared 6.2% from a year ago — the biggest 12-month jump since 1990.

“It’s a large blow against the transitory narrative,” said Jason Furman, who served as the top economic adviser in the Obama administration. “Inflation is not slowing. It’s maintaining a red-hot pace.’’ And the sticker shock is hitting where families tend to feel it most.

At the breakfast table, for instance: Bacon prices are up 20% over the past year, egg prices nearly 12%. Gasoline has surged 50%. Buying a washing machine or a dryer will set you back 15% more than it would have a year ago.

Used cars? 26% more. Although pay is up sharply for many workers, it isn’t nearly enough to keep up with prices. Last month, average hourly wages in the United States, after accounting for inflation, actually fell 1.2% compared with October 2020.

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