Inflation accelerated at its fastest pace since 1982 in November, the Labor Department said Friday, putting pressure on the economic recovery and raising the stakes for the Federal Reserve.
The consumer price index, which measures the cost of a wide-ranging basket of goods, rose 0.8% for the month, good for a 6.8% pace on a year over year basis and the fastest rate since June 1982.
Excluding food and energy prices, so-called core CPI was up 0.5% for the month and 4.9% from a year ago, which itself was the sharpest pickup since mid-1991.
The Dow Jones estimate was for a 6.7% annual gain for headline CPI and 4.9% for core.
With unemployment claims running at their lowest pace since 1969 and gross domestic product expected to show strong gains to end 2021 after a lackluster third quarter, inflation remains the biggest problem for the recovery.
The Federal Reserve is watching the data closely ahead of its two-day meeting next week.
Central bank officials have indicated that will begin slowing the help they’re providing in an effort to tamp down inflation. Investors widely expect the Fed to double the tapering of its asset purchases to $30 billion a month, likely starting in January. That would enable the Fed to start raising interest rates as soon as next spring.
President Joe Biden has been paying a political price for surging prices: A recent CNBC survey showed his approval rating stuck at just 41%, due in large part to 56% of respondents who disapprove of his economic record, compared to just 37% who approve.
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