Inflation rose 6.2% annually in October, marking the highest rate increase in 31 years, the U.S. Bureau of Labor Statistics (BLS) announced last week. The latest Consumer Price Index (CPI) — which is how the BLS measures inflation — showed consumer prices rose 0.9% from September to October, an increase from the previous month’s pace of 0.4%.
"Prices increased at a faster rate in October due to ongoing supply chain problems and increasing demand," Dawit Kebede, Credit Union National Association (CUNA) senior economist, said. "Used car prices that had been declining for the last two months increased in October as computer chip shortages, labor, and transportation issues worsened, limiting supply of new vehicles.
"The Federal Reserve in its recent November meeting stated that inflationary pressures are still transitory and that they will be monitoring incoming data closely," Kebede said. "October's CPI report is the highest rate seen in several decades. Consumers are paying higher prices for homes, auto, food, and energy. This might force the Fed to reconsider its assessment concerning the timing of an interest rate increase."
As the Federal Reserve considers the best time to change its monetary policy and raise interest rates amid surging economic growth, it could be a good time to take advantage of interest rates while they remain at historic lows. Visit Credible’s online marketplace to find your personalized rate for a personal loan.
Biden pushes Build Back Better plan
In response to the record-setting inflation numbers, President Joe Biden urged Congress to pass his Build Back Better plan, saying it will help reduce child care, elder care and health care costs for families.
"Seventeen Nobel Prize winners in economics have said that my plan will ‘ease inflationary pressures,’" the White House said in a statement. "And my plan does this without raising taxes on those making less than $400,000 or adding to the federal debt, by requiring the wealthiest and big corporations to start to pay their fair share in taxes."
Biden said that inflation hurts Americans’ finances, and that reversing it is one of his top priorities.
"The largest share of the increase in prices in this report is due to rising energy costs – and in the few days since the data for this report were collected, the price of natural gas has fallen," Biden said. "I have directed my National Economic Council to pursue means to try to further reduce these costs, and have asked the Federal Trade Commission to strike back at any market manipulation or price gouging in this sector."
Rising inflation could push the Central Bank to begin raising rates to combat future inflation. You can take advantage of low rates now by taking out a mortgage refinance, which could help you potentially save hundreds of dollars on your monthly payment. Visit Credible to compare multiple mortgage lenders at once and see which one has the best rate for you.
Some disagree on impact that Biden’s Build Back Better plan could have on inflation
Not everyone agrees that Biden’s Build Back Better plan will improve today’s high inflation rates. In fact, some worry it could make it worse.
"Their answer to this crisis that everyday Americans are facing across the country is to pass this massive multitrillion-dollar bill," former Rep. Tulsi Gabbard (D-HI) said during an interview last week on Fox News' "Your World with Neil Cavuto". "But the reality is that this bill is only going to make the problem worse. You know, our government is already too powerful, it is already too bloated. And what this bill is going to do is make inflation worse."
House Minority Leader Kevin McCarthy (R-Calif.) also released a statement last week, saying inflation is pushing Americans into the most expensive Thanksgiving on record.
"The Joe Biden plan for increasing Americans’ standard of living is a complete failure," McCarthy said. "The cost of getting by in the United States is increasing at a faster rate today than it has in 30 years. And with the holidays around the corner, the Biden administration has only exacerbated the anxiety families face as we approach the most expensive Thanksgiving on record that will involve soaring prices and a scarcity of goods."
If you are struggling to keep up with your expenses as the rate of inflation increases, consider refinancing your private student loans to save money on your monthly payments. Contact Credible to speak to a student loan expert and get all of your questions answered.
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