By Nathalie Voit
The Consumer Price Index (CPI) in October rose 6.2% from a year before, according to data from the U.S. Bureau of Labor Statistics. October’s increase marks the fastest annual change in the rate of inflation since November 1990.
On a monthly basis, the CPI increased 0.9% from September to October. The CPI in September, meanwhile, rose 0.4%.
The core price index, the index for all items excluding the more volatile food and energy categories, rose 4.6% from one year ago. The figure marks the largest year-on-year advance in the prices of core goods since August 1991.
On a 12-month period, energy prices rose 30%, and food prices rose 5.3%, the report revealed.
According to the report, inflation was broad-based, with the largest increases in the indexes for energy, shelter, food, used cars and trucks, and new vehicles. In October, the energy index rose 4.8%, in part due to a 6.1% increase in the price of gasoline and other related inputs. The cost of dining out increased 0.9% since September while prices for groceries rose 1.0%, BLS data revealed.
Airline fare tickets and alcohol were among the few categories to decline in price. Along with shelter and used and new vehicles, the medical care, household furniture, and recreation indexes all advanced last month.
“I do think we’re moving into a new phase where inflation is broader and where things are going to get a little more intense,” said Laura Rosner-Warburton, senior economist at MacroPolicy Perspectives. “Part of that reflects that [supply-chain] bottlenecks aren’t resolved going into the holiday season, when a lot of purchases get made, and that the economy is doing really well, so you have strong demand.”
The Labor Department’s latest news release has Wall Street worried. The CBOE Market Volatility index (.VIX), which tracks future volatility expectations or investor uncertainty in the stock market, jumped to its highest level on Nov. 10 in nearly one month, Reuters reported.
The news comes amid a just-released Producer Price Index (PPI) report detailing an 8.6% increase in the prices for final demand goods over a 12-month period. An increase in costs to producers often gets passed on to consumers, whose spending forms the backbone of the U.S. economy.
“The bigger picture is we’re likely to see inflation climb higher,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics. “Things are going to get worse before they get better.”