Prices climbed 6.8% in November compared to last year, a 40-year high, putting the squeeze on American consumers and complicating the political outlook for President Biden and Democrats pushing their big-spending plans.
Prices rose 0.8% in November compared to October and spread into multiple sectors of the economy, the U.S. Bureau of Labor Statistics reported Friday.
“The indexes for gasoline, shelter, food, used cars and trucks, and new vehicles were among the larger contributors,” the bureau said. “Along with shelter, used cars and trucks, and new vehicles, the indexes for household furnishings and operations, apparel and airline fares were among those that increased.”
Mr. Biden acknowledged that Americans are paying more, but argued the data does not reflect slow improvements.
“Developments in the weeks after these data were collected last month show that price and cost increases are slowing, although not as quickly as we’d like. Half of the price increases in this report are in cars and energy costs from November. Since then, we have seen significant energy price reductions. Gas prices nationally are down from their peak,” Mr. Biden said.
He said, “Even with this progress, price increases continue to squeeze family budgets. We are making progress on pandemic-related challenges to our supply chain which make it more expensive to get goods on shelves, and I expect more progress on that in the weeks ahead.”
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Consumer demand has risen as Americans try to shake off the coronavirus doldrums and spend household cash they saved or received from a government-rescue package earlier this year.
Yet much of the spending has been on cars and other goods instead of services and social experiences, and bottlenecks at key links in the supply chain have resulted in higher prices.
Airline fares and rents have increased, while grocery shoppers are seeing higher prices on common items. Dollar Tree said it is increasing prices on most items to $1.25.
Prices hikes have been bigger and longer-lasting than predicted and are putting the White House, which had argued inflation was transitory, in an awkward position as it tries to pass a multitrillion-dollar social welfare plan.
Sen. Joe Manchin III, West Virginia Democrat, has pointed squarely at inflation as the reason he is hesitant to approve the “Build Back Better” bill.
Former Vice President Mike Pence, who is weighing his political future, said it is time to pull the plug on Mr. Biden’s legislation.
“Today’s consumer price index showing inflation at a 40-year high is bad news for American families struggling to make ends meet and proves that the socialist policies that dominate the Democratic Party are failing our country,” he said through his policy advocacy group, Advancing American Freedom. “Now more than ever, it’s time to turn off the spigot of runaway spending in Washington, D.C., and reject President Biden’s tax and spend monstrosity working its way through Congress.”
Sen. Kevin Cramer, North Dakota Republican, called the inflation “a de facto tax, chipping away at family’s paychecks and eating the savings of hardworking American families.”
“Build Back Broke would only make it worse!” he said.
Mr. Biden and House Speaker Nancy Pelosi took the opposite view, saying the bill would provide immediate cost relief, allow parents to return to the workforce sooner and bolster the economy over the long term.
“The challenge of prices underscores the importance that Congress move without delay to pass my Build Back Better plan, which lowers how much families pay for health care, prescription drugs, child care and more,” Mr. Biden said. “American families should not have to wait to get relief on the cost of prescription drugs like insulin, or see their childcare costs cut by more than half.”