US Consumer Prices Up 5.7% in Year to November, Fastest Gain in 39 Years

WASHINGTON (Sputnik) - US consumer prices grew by 5.7% in the year to November, data from the Commerce Department showed on Thursday as wages and other costs continued to soar in an economy rebounding from the coronavirus pandemic.

Historical data from the Commerce Department showed the consumer prices increase was the largest annual growth in the index in 39 years.

"The PCE [Personal Consumption Expenditures] price index for November increased 5.7 percent from one year ago, reflecting increases in both goods and services... Excluding food and energy, the PCE price index for November increased 4.7 percent from one year ago," the statement said.

The rise in PCE matched the general inflation trend set so far by the Consumer Price Index, a broader inflation gauge that also grew by its fastest pace in almost four decades in November.

The US economy shrank by 3.5% in 2020 from the lockdowns and other restrictive measures imposed to slow down the spread of the novel coronavirus.

This year’s growth has been spotty, with an annualised 3.5% expansion in the first quarter, 3.6% in the second and 2.1% in the third.

The Federal Reserve has projected a 5.5% growth for next year and 4% for 2023. The US central bank’s problem though is inflation, running at near 40-year highs as prices have soared from the lows of the pandemic due to higher wage demands and supply chain disruptions.