The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5% month-to-month in December. This is a decrease in growth from November’s 0.8% figure. Year-on-year, the index rose by 7%, the largest 12-month increase since June 1982.
The monthly changes for each sub-index are as follows:
Shelter and used cars and tracks contributed the most to the increases with food prices also playing a part with a 0.5%. The energy index declined slightly in December following a long series of increases. Other indexes including household furnishings and operations, apparel, new vehicles, and medical care also increased in December while motor vehicle insurance and recreation were among the few to see a decline.
The energy index has risen 29.3% year-on-year while the food index has increased by 6.3% over the same period.
Inflation has been increasing throughout 2021 following the Federal Reserve's loose monetary policy and the US Government's multiple stimulus packages. Covid-19 has also caused supply chain disruptions throughout the world which has meant that supply of goods worldwide has struggled to keep up with demand as some countries reduced covid-19 related restrictions.
Source: US Bureau of Labor Statistics.
The price of bitcoin has responded to inflation, both expected and actual, doubling from sub-$20,000 in December 2020 over $40,000, a level at which it has consolidated during the last few weeks. This followed a run up towards a new all-time high of $69,000 in November 2021. Bitcoin is up 4.88% at $43,735 at the time of publication according to Bitfinex at the time of publication.