Consumer Price Increase Biggest Since 1982

In November 2021, the Consumer Price Index For All Urban Consumers (CPI-U) posted its biggest 12-month increase since June 1982. The CPI-U was up by 0.8% in November 2021 on a seasonally adjusted basis. This was down slightly from the 0.9% rise recorded in October 2021. However, the all items index has risen by 6.8% during the past 12 months, the largest 12-month increase since the period ending in June 1982.

Opinion polls indicate that inflation has become the leading economic concern among Americans. It thus also has become a growing political issue, constituting a major factor in declining approval ratings for President Joe Biden and threatening the sweeping legislation on the economy and climate that he is seeking to get passed by Congress.

Broad-Based Price Increases

The November 2021 rise in the all items CPI-U was the result of broad price increases across most component indexes, similar to the case in October. The indexes for gasoline, shelter, food, used cars and trucks, and new vehicles numbered among the most significant contributors to the overall increase in the CPI-U.

Among other categories that recorded price increases were household furnishings and operations, apparel, and airline fares. Declines were observed in November for motor vehicle insurance, recreation, and communication.

Over the past 12 months, the energy index was up by 33.3 %, while the food index increased by 6.1%. For both of these components of the broader CPI-U, these were the largest 12-month increases in at least 13 years.

Energy

The energy index was up by 3.5% in November, itself driven primarily by a 6.1% hike in the gasoline index, 5.9% in energy commodities, and 3.5% in fuel oil. Over the past 12 months, while the overall energy index was up by 33.3%, gasoline rose by 58.1%, energy commodities by 57.5%, fuel oil by 59.3%, utility piped gas service by 25.1%, energy services by 10.1%, and electricity by 6.5%.

Food

The food index increased by 0.7% in November, with food at home having risen by 0.8% and food away from home by 0.6%. Over the past 12 months, the overall increase of 6.1% in the price of food includes a 6.4% rise in food at home and 5.8% for food away from home.

Vehicles

The rising prices of vehicles, both new and used, continue to be a major contributor to overall inflation. New vehicle prices rose by 1.1% in November and by 11.1% over the past 12 months. Used cars and trucks saw an increase of 2.5% in November and 31.4% over the past 12 months.