(CBS/CNN) — There’s no end in sight for higher prices. US consumer price inflation surged higher again in October, the Bureau of Labor Statistics reported Wednesday.
Over the past 12 months, prices climbed 6.2% — the biggest increase since November 1990.READ MORE: Car Crashes Into Swimming Pool In Norwood
Stripping out food and energy prices, which tend to be more volatile, the index rose 4.6% over the same period, the biggest jump since August 1991.
The overall price index rose 0.9% in October alone, adjusted for seasonal swings, significantly more than the 0.6% economists had predicted, and overshadowing the somewhat more tepid 0.4% increase from September.
Excluding food and energy, prices climbed 0.6% last month — more than in September.
Last month’s price jumps came on the back of increases in multiple categories, including energy, shelter, food and cars. Food prices have risen by nearly 1% for two months in a row.
Energy costs have been going through the roof, jumping 4.8% in October and 30% over the past 12 months.
In New England, home heating costs are expected to skyrocket this winter.
“We’re going into one of the winters that I feel is extraordinarily difficult. Actually, terrifying,” said John Drew, the President and CEO of Action for Boston Community Development or ABCD, a home heating assistance program.
ABCD helps roughly 25,000 Massachusetts families a year with home heating expenses. This year, Drew is encouraging people to apply early before funding begins to run out.
“I’m suspecting that people on the average will have a doubling the amount of cost of energy this winter. That could be anywhere up to $2,000 or $3,000. Therefore, we’re going to need more money,” Drew said.
Pandemic price hikes
Rising inflation has been a hallmark of the pandemic recovery thanks to a potent mix of rampant demand, raw material shortages and choke points along the global supply chains. And the jump in energy costs is only making it worse.READ MORE: 73-Year-Old Woman Killed By Comfort Animal At Cultivate Care Farms In Bolton
America’s inflation problem is likely made worse by the huge stimulus boost Washington provided to get the nation through the worst of the pandemic — which bolstered savings, household wealth and ultimately demand, according to Rick Rieder, BlackRock’s chief investment officer of global fixed income.
“Further employment gains will continue to be a major driver of continued demand strength for goods and services, and higher wages will be a story that will sustain itself for many months to come,” he said.
The Biden administration and the Federal Reserve have been adamant that the price hikes are temporary and to be expected as the economy rebounds from its worst crisis in a generation.
But in a statement Wednesday, President Joe Biden said “inflation hurts Americans pocketbooks, and reversing this trend is a top priority for me.”
Biden also pointed at rising energy costs and said natural gas prices have come down already.
Last week, Treasury Secretary Janet Yellen told CNN that although inflation is high, it’s nowhere near as bad as the inflation spike of the 1970s, when America’s was in a state of stagflation, defined by rising prices and slow growth.
What’s the Fed going to do?
The Federal Reserve is starting to hit the brakes of its pandemic-era stimulus, starting by reducing the monthly pace of asset purchases. That could take some of the heat out of the economy. After all, keeping prices stable is one of the central bank’s main tasks.
But the hotter-than-expected October report raises the question whether the Fed is acting fast enough, or whether it has to roll back stimulus even faster.
Even though one month doesn’t make a trend and the October price jumps could be short-lived, the opposite could also be true.
American consumers are already bracing for higher prices during their holiday shopping sprees.
(© Copyright 2021 CBS Broadcasting Inc. All Rights Reserved. CNN’s Anneken Tappe contributed to this report.)MORE NEWS: Gov. Charlie Baker Weighing $4B Spending Bill Sent To Him By Lawmakers