Inflation soared over the past year at its highest rate in four decades, hammering America’s consumers, wiping out pay raises and reinforcing the Federal...
The price hike effectively wipes out worker pay raises and reinforces the Federal Reserve’s decision to begin raising borrowing rates.8:44 AM on Feb 10, 2022 CST
When measured from December to January, inflation was 0.6%, the same as the previous month and more than economists had expected. Prices had risen 0.7% from October to November and 0.9% from September to October. Even when measured month to month, prices for a broad range of goods and services accelerated from December to January — and not just for items directly affected by the pandemic. Apartment rental costs rose 0.5% in January, the fastest pace in 20 years. Electricity prices surged 4.2% in January alone, the sharpest rise in 15 years, and are up 10.7% from a year earlier. Last month, household furniture and supplies rose 1.6%, the largest one-month increase on records dating to 1967.
The Fed and its chair, Jerome Powell, have pivoted sharply away from the ultra-low-interest rate policies that the Fed pursued since the pandemic devastated the economy in March 2020. Powell signaled two weeks ago that the central bank would likely raise its benchmark short-term rate multiple times this year, with the first hike almost surely coming in March. Investors have priced in at least five rate increases for 2022.
Chipotle said it’s increased menu prices 10% to offset the rising costs of beef and transportation as well as higher employee wages. And the restaurant chain said it will consider further price increases if inflation keeps rising. Levi Strauss & Co. raised prices last year by roughly 7% above 2019 levels because of rising costs, including labor, and plans to do so again this year. Even so, the San Francisco-based company has upgraded its sales forecasts for 2022.Many small businesses, which typically have lower profit margins than larger companies and have struggled to match their sizable pay raises, are also raising prices.
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