Photo of Andrew Jackson on a $20 bill is shown, Friday, Jan. 28, 2022, in Cleveland. A measure of prices that is closely tracked by the Federal Reserve rose 5.8% last year, the sharpest increase since 1982, as brisk consumer spending collided with snarled supply chains to raise the costs of food, furniture, appliances and other goods. (AP Photo/Tony Dejak)
UPDATED 8:41 AM PT – Monday, January 31, 2022
The Federal Reserve noted the biggest increase of inflation since 1982. New data shows consumer spending dropped while prices soared in December. The Fed’s Commerce Department reported on Friday that inflation jumped to 5.8 percent, which is the biggest increase since 1982.
What’s behind the data? Surging Omicron cases reduced traffic to restaurants and other venues. Also, fear of shortages of goods at stores likely drove consumers to get a head-start to their holiday shopping instead of waiting until December.
Meanwhile, businesses have continued to struggle to hire employees, which has led to staff shortages and supply chain issues. Perishable products are expiring before reaching the retail shelves and food prices jumped half a percent as a consequence. It has been immediately evident to shoppers.
The Federal Reserve reportedly plans to raise interest rates several times this year beginning in March in an attempt to control skyrocketing consumer good prices.