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Inflation Soars to 7 % in December

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The year-on-year inflation rate rose in December to 7% -two tenths above that of November-, the Bureau of Labor Statistics reported Wednesday.

This is the largest year-on-year rise since June 1982 and is in line with the predictions of most analysts, who were already forecasting a price increase of close to 7%.

As for the month-on-month rise, consumer prices increased in December by five tenths of a percentage point compared to November, according to this statistic.

Excluding food and fuel prices, which are the most volatile, core inflation in December was 0.6%, with an annual rate of 5.5%.

Energy prices fell in December for the first time in several months, by 0.4%, while food prices rose by 0.5%, according to the government report.

The main drivers behind the sharp rise in prices were housing and second-hand vehicles.

Wednesday’s data adds pressure on the Federal Reserve, which has a dual mandate of promoting full employment and price stability.

Fed Chairman Jerome Powell is running for a second term at the helm and in his appearance yesterday in the Senate he stressed that the Fed’s priority at the moment is to fight high inflation, even if that means putting less emphasis on the goal of full employment.

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