CUNA Senior Economist Dawit Kebede issued the following statement in response to the Labor Department’s December Consumer Price Index Report:

“Consumer prices continued to rise in December, reaching a record high we haven’t seen in 40 years. Supply chain disruptions, high demand for goods that exceeds pre-pandemic trends, and labor shortages increased prices for most consumer items.

“A prolonged surge of the omicron variant may continue to push prices higher by worsening labor shortages and supply disruptions, which showed signs of improvement in December. Recent price increases in housing contribute the most to overall inflation given their larger weight in household spending. This may show a shift from goods to services as the main driver of inflation moving forward.

“The Federal Reserve will most likely raise interest rates earlier than anticipated to control inflation. This is in addition to ending its support for the economy in the form of large asset purchases. This will raise the cost of borrowing for consumers and will reduce excess demand for goods.”