The cost of living is increasing at its fastest pace in almost 40 years right now, with data out on Friday showing the country’s inflation rate hit 6.8 percent last month.
The U.S. Bureau of Labor Statistics said Friday that higher costs for gasoline, shelter, food and new and used vehicles were the biggest factors in pushing the rate to its highest point since June of 1982.
While the number was in line with what economists were expecting, the figure is nonetheless eye-popping. The reasons why inflation is rising around the world are complex, but they boil down to a combination of unprecedented government stimulus cash and record low interest rates colliding with booming consumer demand for goods and services at a time when some supplies are stretched thin.
The pandemic made it harder to produce and ship goods, but after more than a year of lockdowns around the world, consumers are sitting on record amounts of cash and in a mood to spend it.
That’s pushing up prices for everything from housing and oil, even as supplies for things like cars, household goods and even children’s toys are stretched thin.
High inflation means the cost of just about everything is going up, and incomes aren’t going up by nearly enough to offset it yet.
Wage data from the same report shows that the average full-time private-sector worker in the U.S. was earning $29.61 an hour in November of 2020, and that figure has risen to $31.03 last month.
That’s an increase of about 4.7 percent, which means the cost of living for the typical salaried worker is going up 40 percent faster than their paycheck is.