CUNA Senior Economist Dawit Kebede, PhD, issued the following statement in response to the Labor Department’s October Consumer Price Index:
“Prices increased at a faster rate in October due to ongoing supply chain problems and increasing demand. Used car prices that had been declining for the last two months increased in October as computer chip shortages, labor, and transportation issues worsened, limiting supply of new vehicles.
“Shelter prices, which fell at the start of the pandemic and are still lower than their pre-pandemic trend, are still rising, contributing to the large increase in inflation.
“The Federal Reserve in its recent November meeting stated that inflationary pressures are still transitory and that they will be monitoring incoming data closely. October's CPI report is the highest rate seen in several decades. Consumers are paying higher prices for homes, auto, food, and energy. This might force the Fed to reconsider its assessment concerning the timing of an interest rate increase.