Consumer prices are surging at the highest inflation rate in almost 40 years.
Consumer prices rose by 7% in December compared to a year ago, according to the Bureau of Labor Statistics’ monthly report. This number was up from the 6.8% growth in November and represented the highest inflation rate since the 12-month period ending in June 1982. It also marked the third consecutive month of inflation over 6%.
The index for all items, except for food and energy, grew 5.5% in December compared to last year, marking the largest 12-month change since the period ending February 1991. The energy index rose 29.3% compared to last year, with the food index rising 6.3%.
Footwear prices continued to increase, growing 6% in December year over year. This marked the ninth consecutive month of year over year increases and the fourth highest year over year growth in more than 32 years, according to the Footwear Distributors and Retailers of America (FDRA). For the full year, footwear grew 3.7%, the biggest annual increase in 32 years.
Men’s footwear grew 7.4% and women’s growing 5.8%. Children’s footwear prices rose 4.1%.
“U.S. companies and consumers face numerous issues as we emerge from the pandemic, in particular a supply chain crisis and inflationary pressures,” said FDRA President and CEO Matt Priest. “We urge Washington to immediately remove these onerous footwear tariffs to provide some much-needed relief from rising prices to American families, businesses, and workers during these difficult times.”
Online prices grew 3.1% in December year-over-year, according to recent data from Adobe. This marked the 19th straight month of online inflation, up 0.8% from November. Standout categories were grocery, where prices grew 4.9% year over year, and apparel, which grew 16.6% year over year.
At the same time, online consumer spending has remained high. In 2021, online spending hit a record $855 billion, marking a 9% increase over 2020.
“Inflation online is showing no signs of easing, as durable consumer demand is being met with the same, persistent supply challenges that produced over six billion out-of-stock messages online this holiday season,” said Patrick Brown, Adobe’s VP of growth marketing and insights.
Skyrocketing consumer demand coupled with limited product supply and high import duties on certain products have partly contributed to recent inflationary trends.
Additionally, higher wages across the retail industry have also contributed to higher prices, as employers offer higher starting wages and benefits to attract and maintain talent amid a challenging hiring market. For example, Macy’s recently announced that it would boost its minimum pay to $15 per hour and launch a tuition benefit program for all U.S.-based salaried and hourly employees.