2021 sees 7% inflation

The U.S. Bureau of Labor Statistics reported an inflation increase of 0.5% in December, with the last 12 months showing a 7% inflation rate, the largest 12-month increase since June 1982.

The all items less food and energy index rose 5.5%, the largest 12-month change since the period ending February 1991. The energy index rose 29.3 percent over the last year, and the food index increased 6.3 percent.

Medical care commodities rose .4%, while Medical care services rose 2.5% over the same time period.

The biggest drivers of inflation were gasoline (49.6%), energy commodities (48.9%), fuel oil (41%), and used cars/trucks (37.3%).

For December, the index for hospital services increased 0.2% and the index for prescription drugs rose 0.1%, while the index for physicians’ services was unchanged. Other indexes that rose in December include airline fares (+2.7%), personal care (+0.5%), tobacco (+0.7%), and education (+0.1%). The Federal Reserve bank is monitoring inflation data and is expected to raise interest rates this year in an effort to combat increasing prices and as the employment situation continues to improve.