Economy

US consumer prices soared 7% in past year, most since 1982

Inflation jumped at its fastest pace in nearly 40 years last month, a 7 percent spike from a year earlier that is pushing up household expenses, eating into wage gains and heaping pressure on President Joe Biden and the Federal Reserve to address a growing threat to the U.S. economy.

Prices have risen sharply for cars, gas, food and furniture during a rapid recovery from the pandemic recession. Americans have ramped up spending amid shortages of workers and raw materials that have squeezed supply chains.

The Labor Department reported Wednesday that excluding volatile food and gas prices, so-called core prices surged 0.6% from November to December. Measured year over year, core prices jumped 5.5% in December, the fastest such increase since 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 expenses. Polls show that inflation has started displacing even the coronavirus as a public concern, making clear the political threat it poses to President Biden and congressional Democrats.

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