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Inflation rises to 6.8%, highest jump in 39 years

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Published  December 10, 2021 7:08pm PST
Economy
KTVU FOX 2

Inflation rises to highest rate seen in 39 years

KTVU's Tom Vacar reports.

The U.S. Labor Department reported Friday that inflation surged to a 39-year high as the consumer price index rose 6.8% in November from a year ago.

The CPI measures a wide range of goods and services, from gasoline to groceries, from health care to housing costs. The economy is so good, a nasty but natural consequence is losing some purchasing power to inflation.

Federal stimulus programs and increased government spending has fueled a lot of consumer spending. But, with supply chain issues causing a shortage of consumer goods, spending has caused November prices to rise higher compared to last year.

"It feels like nonsense to me. Gas went up. It's ridiculous going to the grocery store. A candy bar is like $2 or $3 right now for just a little small size. It's ridiculous," said shopper Trey Harris.

The federal government reported that layoffs reached a 52-year low nationwide.

Former EDD Director, labor attorney Michael Bernick, sees the low layoffs this way. "Employers very reluctant to lay off workers, a positive, and also employers holding on to the team workforce that they have. That's the very low number of layoffs the past week," Bernick said.

As demand for products and services continues to increase, employers are desperate to find new employees. But only one thing, in and of itself that increases inflation, seems to work to get folks back to work.

"It continues to drive up wages. So, each month, we've seen wages go up," said Bernick.

There are more than a million open jobs listed in California, 11 million nationwide.

"There are 1.5 jobs per unemployed worker; the most recent figure. That's the highest number; the highest number over the past two decades," said Bernick.

While the tight labor market is raising low-wage workers' pay, these modest gains are often being wiped out by inflation.

For example, next month, Social Security recipients will get 5.9% more money in their checks, but with 6.8% inflation, their raise will get eaten up. They'll end up losing about 1% of their current purchasing power.