Consumer prices rose 7.0% for the year ending in December, the highest increase since 1982.
Source: US Bureau of Labor Statistics
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The Consumer Price Index (CPI), which measures inflation for consumer goods and services, increased 0.5% in December alone. The inflation tops the 6% increase posted for the prior three consecutive months.
The increase was largely attributable to a surge in the indexes for shelter and for used cars and trucks.
Inflation has jumped in recent months as the reopening US economy struggles to fulfil the rising demand during COVID-19. The increase in costs for goods and services has erased wage gains despite the favourable hiring conditions for workers.
The CPI, excluding the volatile food and energy items, increased by 0.6% last month after rising 0.5% in November. In the 12 months through Dec, the core CPI increased by 5.5%.
Core inflation is being driven by increasing prices for services like rentals and scarce goods such as motor vehicles. The year-on-year core CPI rate is likely to peak in February.