Headline consumer price rose 7% last month, the Bureau of Labor Statistics said Wednesday, confirming the fastest pace of inflation since 1982.
U.S. inflation accelerated to the fastest pace in four decades last month, data from the Bureau of Labor Statistics indicated Wednesday, as surging rent, used car and travel costs continue to add upward pressure to headline readings.
The headline consumer price index for the month of December was estimated to have risen 7% from last year, up from the 6.8% pace in November and the fastest rate since June of 1982, powered largely by used and new cars and surging rental costs. On a monthly basis, inflation was up 0.5%, the BLS said, with both tallies essentially matching Wall Street forecasts.
So-called core inflation, which strips-out volatile components such as food and energy prices, rose 0.6% on the month, and 5.5% on the year, the highest since February of 1991, the report noted, with the annual reading coming in just shy of the Street consensus forecast.
Federal Reserve Chairman Jerome Powell told lawmakers during hits Senate confirmation hearing on Capitol Hill yesterday that he expects inflationary pressures — recently dismissed as ‘transitory’ — to persist throughout much of the year.
He did not, however, suggest a more hawkish response to the fastest inflation levels since the early 1980s, noting only the he and his colleagues would be “humble but a bit nimble” in executing rate hikes and taking any decision on running-off the Fed’s $9 trillion balance sheet.
Stock Market Today – 1/12: Dow Edges Higher With Inflation In Focus As Powell Vows Rate Action
U.S. stocks extended modest gains in the wake of the data release, with futures tied to the Dow Jones Industrial Average indicating a 165 point opening bell gain and those linked to the S&P 500 priced for a 24 point move to the upside.
Benchmark 10-year U.S. Treasury bond yields, meanwhile, slipped to 1.748% ahead of a $36 billion auction later in the session.
The CME Group’s FedWatch tool is showing a 74.4% chance of a rate hike in March, up from around 33.6% at the beginning of December. The Atlanta Federal Reserve’s GDPNow forecasting tool, a real-time benchmark, suggests the U.S. economy is growing at an 6.8% clip.
