Inflation surged in October, according to the Bureau of Labor Statistics Consumer Price Index Summary. Compared to October 2020, prices rose by 6.2%. The BLS reported this was the largest jump since November 1990. The prices of a number of items rose at a pace well into the double digits. The price of this item — fuel oil — is soaring, up 59.1% from a year ago. (This city has the most expensive gas in America.)
The presence of inflation, and how long it may last, has created a pitched debate. Most senior government officials, particularly Secretary of the Treasury Janet Yellen and Chair of the Board of Governors of the Federal Reserve System Jerome Powell say inflation will be modest and short lived. Prominent Harvard economist and former Treasury chief Larry Summers, who believes the risk of sharp inflation is substantial, recently took a direct shot at Yellen.
Summers tweeted, “I actually believe the gap between Treasury & Fed statements and the everyday experience of businesses and consumers in terms of inflation has widened in recent months.”
At the center of the inflation conversation is shortages of goods used by both individuals and businesses. Some of these shortages were caused by shutdowns because of the COVID-19 pandemic. Others are due to supply chain disruptions, which have caused the equivalent of huge traffic jams of tankers and container ships outside America’s largest ports.
Concerns about how inflation might derail the economic rebound have started to emerge. The carefully followed University of Michigan Surveys of Consumers showed that, in October, consumer confidence was muted, to a large extent because: “Consumers not only anticipated the highest year-ahead inflation rate since 2008 in the October survey, but also expressed greater uncertainty about the year-ahead inflation rate than anytime in nearly 40 years.“
To a great extent, inflation is in the eye of the beholder. People who drive a great deal are one example. The AAA shows that the average price nationwide for a gallon of regular gas is $3.42. A year ago, that figure was $2.11. That is a 62% increase. The price of beef rose by about 20% in October compared to the same month last year. Meat eaters have a problem. Vegetarians are better off, at least for now. (This is the price of steak the year you were born.)
24/7 Wall St. reviewed the BLS Consumer Price Index Summary to find the items with double-digit price increases from a year ago.