2021 saw the closing estimates of inflation at their highest from 1982, thanks to the surging demand of consumer goods by American consumers and the widespread and global supply chain distortion caused by the pandemic.
The Consumer Price Index rose by 7% in December 2021, with respect to the same month of 2020, and by 6.8% in November. The increasing trend of inflation seem to stabilize around digits that surpass 6% for the last three months of 2021.
Automobile and durable goods prices keep influencing the inflation rise, helped by the demand and offer imbalances caused by the pandemic. Another important factor which contributes to such soaring inflation is the rise of energy prices, due primarily to the pandemic disruption to the market and the geopolitical instability of the major exporting countries.
Such high inflation rate is coupled with a fall in unemployment rate and a rise of hourly wages: the Labor Department estimates that unemployment fell from 4.2% to 3.9%, close to full employment equilibrium, and that the hourly wages rose by 4.7%, with respect to the previous year, contributing to the average increase of 3% from pre-pandemic times. At the same time, the National Federation of Independent Business highlight how 49% of small business declared in December they will be raising prices in the following three months.