Checking bacon prices like [fotostorm/E+ via Getty Images]
Cry me a pork chop... Pork-chop prices are up 16% from last year, and they're not the only ones. The Labor Department just dropped October’s Consumer Price Index, which measures prices of 80K common items. Overall, consumer prices jumped 6.2% from October last year — the fastest yearly increase in 30 years. The pace of inflation accelerated sharply from September, and it was the fifth straight month above 5%. Price increases were broad, but we’ve pulled some gems:
The price is not right... While the Fed still expects inflation to be temporary, prices have been surging longer (and higher) than expected. This #flated sitch is a result of multiple factors, including pandemic-related supply shortages, labor shortages, supply-chain backlogs, and booming consumer demand. Americans' wallets have been padded by trillions in stimulus cash, which has triggered faster-than-expected rebound in demand. But supply bottlenecks are making it hard to meet that demand and are driving up prices.
Inflation can be a self-fulfilling prophecy... aka self-flating. Expectations of inflation can make inflation worse, or even cause prices to rise unnaturally. If people expect higher prices, they're more likely to demand higher wages and accept inflated costs. And expectations are high: Americans' three-year inflation expectations have hit 4.2%, the highest level on record. If it continues, inflation could stay elevated even after supply bottlenecks ease.