Consumer Prices Rise at a Record Rate in the World’s Major Economies

The world's major economies have had the highest consumer price increase in decades.

The rebound in consumer prices is more intense and lasting than many economists and the Federal Reserve had initially expected after the pandemic.

Inflation has become the main concern of the strategists of the stock market, and the leaders of the financial world.

Some experts say that much higher or more rigid inflation could lead the Fed to accelerate the completion of its bond-buying program and move to raise interest rates earlier than expected.

CPI Index Records Highest 12-Month Increase Since November 1990

The U.S. Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9 percent in October on a seasonally adjusted basis after rising 0.4 percent in September, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 6.2 percent before seasonal adjustment.
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The monthly all items seasonally adjusted increase was broad-based, with increases in the indexes for energy, shelter, food, used cars and trucks, and new vehicles among the larger contributors. The energy index rose 4.8 percent over the month, as the gasoline index increased 6.1 percent and the other major energy component indexes also rose. The food index increased 0.9 percent as the index for food at home rose 1.0 percent.

Consumer Price Index (CPI)

The index for all items less food and energy rose 0.6 percent in October after increasing 0.2 percent in September. Most component indexes increased over the month. Along with shelter, used cars and trucks, and new vehicles, the indexes for medical care, household furnishing and operations, and recreation all increased in October. The indexes for airline fares and alcoholic beverages were among the few to decline over the month.

Read here all report Consumer Price Index

The all items index rose 6.2 percent for the 12 months ending October, the large st 12-month increase since the period ending November 1990. The index for all items less food and energy rose 4.6 percent over the last 12 months, the largest 12-month increase since the period ending August 1991. The energy index rose 30.0 percent over the last 12 months, and the food index increased 5.3 percent.

China Also Suffers Economic Blows From the Pandemic

While this is happening in the United States, in China things have not been working very well either.

China’s factory-gate prices rose at the fastest pace in 26 years in October, beating forecasts and further squeezing profit margins for producers already grappling with soaring coal prices and other commodity costs due to a power crunch.

The producer price index (PPI) climbed 13.5% from a year earlier, faster than the 10.7% rise in September, the National Bureau of Statistics (NBS) said in a statement.

It matched a pace not seen since July 1995 and was faster than the 12.4% forecast by analysts in a Reuters poll.

The jump was driven by higher raw material costs and production cuts at factories, as government restrictions on carbon emissions and rising prices for coal, a key fuel for electricity generation, led to rationing of Energy.

However, the energy crisis has eased somewhat since the government's intervention to stabilize the coal market.

Meanwhile, China's consumer price index (CPI) grew 1.5% in October year-on-year, accelerating from the 0.7% rise in September and outpacing the 1.4% gain noted by the Reuters survey, according to NBS data.

Other recent indicators show China’s economy is losing steam with growth widely expected to slow further in the fourth quarter from a one-year low of 4.9% in the third quarter. Factory activity shrank for a second straight month in October.

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