Logo
Sound journalism, grounded in facts and Biblical truth | Donate

Inflation hits nearly 40-year high


Federal Reserve Board Chairman Jerome Powell testifies before a Senate committee at his renomination hearing on Tuesday. Associated Press/Photo by Brendan Smialowski

Inflation hits nearly 40-year high

The U.S. Labor Department reported Wednesday that consumer prices rose 7 percent in December from a year earlier. That’s the biggest leap since 1982. The highest price spikes were for cars, gasoline, food, and furniture as Americans ramped up spending and worker and material shortages squeezed supply chains. Used car prices soared more than 37 percent over the past year due to semiconductor shortages, and new car prices jumped nearly 12 percent. Although gasoline prices fell 0.5 percent in December, the national average of $3.30 per gallon is still 50 percent higher than the average a year ago.

Is there an end in sight? Some economists believe prices may settle down as snags in the supply chain ease, but most say inflation will remain elevated throughout this year. Rising prices have wiped out the pay increases that many Americans received in recent months. A recent Associated Press/NORC poll found that 68 percent of Americans now see the economy as a bigger concern than the pandemic. The Labor Department report ramps up pressure on President Joe Biden and the Federal Reserve to resolve inflation issues. Economists think it unlikely the Fed will reach its long-term goal to reduce inflation to 2 percent per year.

Dig deeper: Listen to Josh Schumacher report on The World and Everything in It how supply chain issues are hitting the auto industry.


Kent Covington

Kent is a reporter and news anchor for WORLD Radio. He spent nearly two decades in Christian and news/talk radio before joining WORLD in 2012. He resides in Atlanta, Ga.

@kentcovington

COMMENT BELOW

Please wait while we load the latest comments...

Comments

Please register, subscribe, or login to comment on this article.


DWES4537

Kent read some Milton Friedman. Inflation and its cause is not a mystery and some economists have no understanding of inflation because of their world view. Buttons with "WIN" printed on them did solve the inflation in the 70's and similar thinking will not solve it now.
Please refrain from quoting poles as a news worthy item. We can get AP poles from CNN etc. A pole found that the majority of people think that Dihydrogen oxide should be banned. Do better.

CaptTee

Blaming inflation on supply chain snags is deception.

Prices will not drop as much as they went up when the supply chain issues are fixed.

Inflation is what you get when you currency loses value, so you have to pay more. Skyrocketing Congressional spending is the cause of our present inflation, not temporary supply chain issues.

Fixing the supply chains will not stop or reverse inflation.

news2me

Right now people might pay a whole lot more if they find even the simplest stuff.
Shelves are looking VERY bare. Went today to get cat food. Went somewhere else and paid more because it was there. Last bag. Had to have it no matter the cost.
We have so many grocery stores in our neighborhood it's obscene. So we store hop. But I am a bit concerned about the scarcity of some things. When hoarders took over last time, rice was difficult to find. There are other things that are important, but rice is a staple for some people. We shopped a lot. When we found rice we bought a couple of large bags and took them to the church to share. When our neighbor found something he thought we needed, he shared his finds with us.