US prices hit 4-decade high in 2021

US consumer prices jumped last year at the fastest pace in four decades, the government confirmed Wednesday, underscoring the potent inflation wave that has sapped public support for President Joe Biden even as the economy recovers from the pandemic.

The seven percent increase in the Labor Department's consumer price index (CPI) over the 12 months to December was the highest since June 1982, as prices rose for an array of goods especially housing, cars and food.

Since taking office last January, Biden has presided over an economy that has expanded rapidly and seen millions of people who lost their jobs to the Covid-19 pandemic return to work.

But a collision between rebounding demand, labor shortages and global supply chain snarls -- especially computer chips for cars -- caused prices last year to climb upwards at an ever-faster rate.

The White House echoed the views of some economists in a tweet predicting  "the rate of price increases will moderate in the months ahead as we make progress with the pandemic and other challenges.

"Still, while the data contained signs of a nearing summit, relief may not necessarily come quickly.

"The peak is close, but the speed of the coming downshift is uncertain," said Ian Shepherdson of Pantheon Macroeconomics.

For the Republican opposition, the inflation data underscored their belief that the Democratic president has mishandled the recovery.

"This trend isn't 'transitory,' and it's all happening under Democrats' one-party control," tweeted Kevin McCarthy, the top Republican in the House of Representatives.