Prices for US consumers jumped 6.2% in October compared with a year earlier as surging costs for food, gas, and housing left Americans grappling with the highest inflation rate since 1990. The year-over-year increase in the consumer price index exceeded the 5.4% rise in September, the Labor Department reported Wednesday. The Wall Street Journal notes it's the fifth month in a row where the increase was north of 5%. From September to October, prices jumped 0.9%, the highest month-over-month increase since June.
Energy costs soared 4.8% just from September to October, with gasoline, natural gas, and heating oil surging for the same reason that many other commodities have grown more expensive: Demand has risen sharply as Americans are driving and flying more, but supplies haven’t kept up, reports the AP. "If you ... fill your gas tank on the way home so you can go to work or take your kids to school, you're feeling this," Mary Daly, president of the Federal Reserve Bank of San Francisco, tells NPR, noting that pain is looming in the form of ramped up heating bills this winter. To wit, the Energy Department forecasts those bills will be up 54% this winter over last.
Economists still expect inflation to slow once supply bottlenecks are cleared and Americans shift more of their consumption back to pre-pandemic norms. As COVID-19 fades, consumers should spend more on travel, entertainment, and other services and less on goods such as cars, furniture, and appliances, which would reduce pressure on supply chains. But no one knows how long that might take, though predictions skew pessimistic. "The inflation overshoot will likely get worse before it gets better," said Goldman Sachs economists in a research note Sunday. "Inflation is clearly getting worse before it gets better," echoes Principal Global Investors' head strategist to CNBC.
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