U.S. consumer prices continued to rise last month, according to a new report from the Bureau of Labor Statistics – driving inflation rates to 5.4% and outpacing economists’ predictions for recovery amid continued demand for housing, vehicles and other goods.

What You Need To Know

  • U.S. consumer prices accelerated by 0.4% last month, according to a report from the Bureau of Labor Statistics – rising to a 13-year high that has defied most economists’ predictions

  • Most economist, including Fed Chairman Jerome Powell, believed inflation would level off as the U.S. economy continued its recovery from the COVID-19 pandemic

  • Instead, increased demand for goods, such as housing and cars, has had the opposite effect – driving up prices for many goods, and causing supply chain bottlenecks across the globe

  • The price increases could also serve as a political liability for Democrats heading into the 2022 midterm elections – and already, Republicans are seizing on the numbers in an attempt to blame President Biden and Democrats

The surge in consumer prices, the largest since 2008, presents a new hurdle for the Biden administration and Fed Chairman Jerome Powell, who have repeatedly claimed that inflation rates are temporary and would level out as America continues to recover from the COVID-19 pandemic.

Some economists say that what was expected to be a short-term spike in prices could last much longer.

“We’re definitely seeing prices rising faster than we've seen in quite a long time across a broad range of different goods and services,” said Tara Sinclair, an economics professor at George Washington University. She attributed part of that to the shock of COVID-19 on the economy, which has been “historically damaging and deep.”

The spike in prices, she said, is causing “a lot of concern for both business owners as well as for households that are going out and suddenly finding that their everyday purchases are costing more.”

“And that is a genuine concern right now. The question is, where is [the spike] coming from? And when's it going to slow down? Or, you know, [go] back to something more normal … And what is normal going to look like?”

Consumer price inflation rose 0.4% in September, according to the Bureau of Labor Statistics report. The rise is due in part to continued demand and ongoing supply chain problems.

“We've seen lots of issues with supply chains, we've seen lots of issues with workers needing to be reallocated,” Sinclair told Spectrum News. “And all of these things take time to adjust. And sometimes when we're trying to adjust for things, we first have prices go up quite a bit, and then we figure out how to deliver a cheaper product. And we're figuring that all out right now.”

The White House, for its part, has sought to argue that getting the economy back on track is a “gradual” process that will face its share of setbacks.

“We're at this point because the unemployment rate has come down and been cut in half, because people are buying more goods, because people are traveling, and because demand is up,” White House press secretary Jen Psaki told reporters.

But with the 2022 midterm elections fast approaching, Republicans are eager to cast the the slower-than-anticipated economic recovery as a direct failure of the Biden administration.

Rep. Elise Stefanik, R-N.Y., was one of many House Republicans who seized on the report, writing on Twitter: “Americans can’t afford Joe Biden!”

But Sinclair told Spectrum News that the economic woes are a global issue.

“I don't think that there's any way that the President, the United States could personally own the entire supply chain globally, for example," Sinclair said.

But whether voters will share this view when they head to the ballot boxes next fall remains to be seen.