Inflation hits 40 YEAR high as prices jump by 7% in a year – after Biden insisted surging cost of living was just ‘a bump in the road’: America draws comparisons with Soviet Union as grocery store shelves go bare
- Annual inflation hit 7% in December, the highest increase since 1982, the Labor Department said Wednesday
- Labor shortage and supply chain chaos are sending costs higher for businesses, who pass on high prices
- Omicron variant is inflicting havoc on the labor pool, spurring shortages and increasing inflationary pressure
- Biden is under pressure over rising prices and for months insisted the phenomenon was ‘transitory’
The annual US inflation rate has jumped to 7 percent, its highest level in nearly 40 years, adding woes for consumers and compounding the issue as a political liability for President Joe Biden.
The consumer price index rose 0.5 percent last month after surging 0.8 percent in November, the Labor Department said on Wednesday, as supply chain issues persist and empty grocery shelves across the nation draw comparisons to the Soviet Union and put further upward pressure on prices.
It pushed annual inflation to 7 percent in December, the highest increase since June 1982 and up from November’s 6.8 percent annual rate.
A labor shortage is boosting wages, sending costs higher for businesses, and chaos in the supply chain is showing little sign of easing as Omicron sidelines workers by the millions, suggesting that high inflation could persist well into 2022.
Excluding volatile food and energy prices, so-called core inflation rose 0.6 percent on the month in December for an annual gain of 5.5 percent, the fastest 12-month increase since February 1991.
Rising prices have wiped out the healthy pay increases that many Americans have been receiving, making it harder for households, especially lower-income families, to afford basic necessities.
Polls show that inflation has started displacing even the coronavirus pandemic as a public concern, making clear the political threat it poses to Biden and congressional Democrats, whose House and Senate majorities hang in the balance in November’s election.
The White House on Wednesday morning tried to temper expectations ahead of the inflation report, after months of the Biden administration insisting that rising prices are ‘transitory.’
‘It’s highly unlikely that it’s going to be long-term inflation that’s going to get out of hand,’ Biden said last July.
After last month’s inflation report, Biden acknowledged that rising prices were a ‘bump in the road’ but insisted that consumer prices would soon level off.
Republicans were quick to respond to Wednesday’s inflation reading, with House Minority Leader Kevin McCarthy tweeting: ‘This trend isn’t “transitory,” and it’s all happening under Democrats’ one-party control.’
McCarthy included an animated graphic showing Biden’s face tracking the annual inflation rate from his January 2020 inauguration through December.