U.S. consumer prices rose solidly in November as Americans paid more for food and a range of goods, leading to the largest annual gain since 1982, posing a political nightmare for President Joe Biden’s administration and cementing expectations for the U.S. Federal Reserve to start raising interest rates next year. The report from the U.S. Labor Department on Friday, which followed on the heels of a slew of data this month showing a rapidly tightening labor market, makes it likely the U.S. central bank will announce that it is speeding up the wind-down of its massive bond purchases at its policy meeting this week. With supply bottlenecks showing little sign of easing and companies raising wages as they compete for scarce workers, high inflation could persist well into 2022. The increased cost of living, the result of shortages caused by the relentless COVID-19 pandemic, is hurting Biden’s approval rating. The White House and the Fed have characterized high inflation this year as transitory. “There’s not much room to explain away this inflation from pandemic or reopening anomalies,” said Will Compernolle, a senior economist at FHN Financial in New York. “Inflation is a tax, gas and food are among the most regressive aspects of it. Lower-income Americans spend disproportionately on both.” The consumer price index increased 0.8 percent last month after surging 0.9 percent in October. The broad-based rise was led by gasoline prices, which increased 6.1 percent, matching October’s gain. With crude oil prices declining recently, gasoline prices have likely peaked for now. Food prices rose 0.7 percent. The cost of food at home increased 0.8 percent, driven by a jump in the price of fruits and vegetables, meat, and cereals and bakery products. The price of food consumed at home gained 6.4 percent over the past 12 months, the most since December 2008. Dining out was also more expensive last month. In the 12 months through November, the CPI accelerated 6.8 percent. That was the biggest year-on-year rise since June 1982 and followed a 6.2 percent advance in October. Economists polled previously had forecast the CPI would climb 0.7 percent and rise 6.8 percent on a year-on-year basis. Rising inflation is eroding wage gains. Inflation-adjusted average weekly earnings fell 1.9 percent on a year-on-year basis in November. Biden acknowledged the increased burden on household budgets from the high inflation, while trying to reassure Americans that the country was pushing ahead with efforts to ease supply bottlenecks.(SD-Agencies) | 