The cost of living surged in October

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Consumer prices increased 0.9% in one month

Inflation was red hot in October. The Labor Department reports that the Consumer Price Index (CPI) rose by 0.9% last month from September. On a year-over-year (YOY) basis, inflation is surging at 6.2%, the highest rate since 1990.

The monthly all items seasonally adjusted increase was broad-based, with consumers paying more for energy, shelter, food, used cars and trucks, and new vehicles. Energy costs were 4.8% higher, largely driven by the cost of gasoline.

Food costs were another major factor driving consumer prices higher last month. The overall cost of food rose by 0.9% from September to October and was 5.3% higher than 12 months ago. The cost of groceries increased slightly more than food consumed away from home.

The CPI for all items other than food and energy rose by 0.6%, showing that inflation is embedded in many other sectors of the economy. Here are some of the larger increases:

  • New vehicles -- up 1.4% over September and up 9.8% YOY

  • Used vehicles -- up 2.5% over September and up 26.4% YOY

  • Shelter -- up 0.5% over September and up 3.5% YOY

  • Transportation services -- up 0.4% over September and up 4.5% YOY

  • Medical care -- up 0.5% over September and up 1.7% YOY

Analysts say supply chain and staffing issues are contributing to rising prices. Merchants have newfound pricing power because of continuing shortages.

Unemployment claims still falling

The Labor Department also reports that initial claims for unemployment benefits totaled 267,000 last week, the lowest number since the pandemic began. The number of claims was 4,000 fewer than last week, which had been a post-pandemic low.

The total number of people who are continuing to draw unemployment benefits was 2,565,853, a decrease of 107,095 from the previous week. There were 21,713,655 weekly claims filed for benefits in all programs in the comparable week in 2020.

During the week ending October 23, extended jobless benefits were available in Alaska, Connecticut, New Jersey, and New Mexico. 

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