The U.S. Labor Department said that consumer prices jumped 7.5% last month compared with 12 months earlier, the steepest year-over-year increase since February 1982
The prices of food, gas and more are going up. WASHINGTON — 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 Reserve’s decision to begin raising borrowing rates across the economy.
There are few signs that inflation will slow significantly anytime soon. Most of the factors that have forced up prices since last spring remain in place: Wages are rising at the fastest pace in at least 20 years. Ports and warehouses are overwhelmed, with hundreds of workers at the ports of Los Angeles and Long Beach, the nation’s busiest, out sick last month. Many products and parts remain in short supply as a result.
Over time, those higher rates will raise the costs for a wide range of borrowing, from mortgages and credit cards to auto loans and corporate credit. For the Fed, the risk is that in steadily tightening credit for consumers and businesses, it could trigger another recession. “We keep thinking that beef is going to level up and then go down, and it just hasn’t happened yet,” said John Hartung, the company’s chief financial officer.
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. The National Federation for Independent Business, a trade group, said it found in a monthly survey that 61% of small companies raised their prices in January, the largest proportion since 1974 and up from just 15% before the pandemic.
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