The expected burst of inflation this year reflects sharply higher prices for food and energy, but also new and used cars, hotel rooms, clothing, and furniture, among other goods and services.
- “Price increases stemming from ongoing supply chain bottlenecks amid strong demand will keep the rate of inflation elevated, as supply/demand imbalances are only gradually resolved,” said Kathy Bostjancic, an economist at Oxford Economics, a consulting firm.
- “While we share the Fed’s view that this isn’t the start of an upward wage-price spiral, we look for inflation to remain persistently above 3% through mid-2022.”
- Higher prices are also outstripping the pay gains many workers are able to obtain from businesses, who are having to pay more to attract employees.
- Average hourly wages rose 4.6% in September from a year earlier, a healthy increase, but not enough to keep up with inflation.
- Gas prices jumped 1.2% last month and have soared more than 42% compared with a year ago. Electricity prices rose 0.8% in September from August.
- Supply chain disruptions continue to drive new car prices higher, which rose 1.3% last month and are up 8.7% from a year ago, the largest 12-month increase since 1980. A shortage of semiconductors has restrained vehicle production and left fewer cars on dealer lots.
SOURCE: AP
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