Inflation tops 6%

Consumer inflation surged in October as fuel costs picked up, supply chains remained under pressure and rents moved higher — bad news for economic policymakers at the Federal Reserve and for the Biden White House, which had been emphasizing a recent slowdown in price gains.

Inflation picked up to 0.9 percent last month from September, a Labor Department report showed, faster than the prior month’s increase of 0.4 percent and well above economists’ expectations. So-called core price gains, which strip out products like food and fuel, also accelerated.

Overall prices have climbed by 6.2 percent over the past 12 months, the fastest pace since 1990.

The fresh data scupper a White House talking point. Officials had regularly pointed out that while price gains were faster than usual, at least they were slowing down from rapid summertime readings.

But instead of cooling off toward the end of 2022 as many policymakers had expected, inflation rates remain far faster than the 2 percent annual gains the Federal Reserve aims for on average over time. While the Fed sets its goal using a separate measure of inflation — the Personal Consumption Expenditures index — that too has picked up sharply this year. The C.P.I. reports come out faster, and help to feed into the Fed’s favored gauge, so they are closely watched by economists and Wall Street investors.

Administration and Fed officials alike still expect rapid inflation to eventually fade. But they have had to revise how quickly that might happen: Supply chains remain badly snarled, and demand for goods is holding up and helping to fuel higher prices. As wages begin to rise in many sectors amid labor shortages, there are reasons to expect that some employers might charge their customers more to cover climbing worker costs.

“It is now clear that this process will take longer than initially expected, and the inflation overshoot will likely get worse before it gets better,” Goldman Sachs economists wrote in a research analysis this week.

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