Will US consumer price inflation hit another 40-year high?

The rise in US consumer prices is likely to have reached another four-decade high in December, capping a year of rampant inflation fuelled by supply chain logjams, labour shortages and strong spending.

Economists polled by FactSet anticipate a 0.5 per cent month-to-month increase in the consumer price index when the Bureau of Labor Statistics releases its report on Wednesday. That would leave CPI inflation up 7.1 per cent year on year, which would represent the biggest annual increase since February 1982. In November, consumer prices were up 6.8 per cent on an annual basis and 0.8 per cent against the previous month.

Price increases accelerated for much of 2021, prompting officials at the Federal Reserve to ponder earlier and faster interest rate increases as the central bank unwinds the economic support it implemented at the beginning of the coronavirus crisis.