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On the Money — Inflation hits highest level in decades

On the Money — Inflation hits highest level in decades
Written by Publishing Team

Happy Wednesday and welcome to On The MoneyYour overnight guide to everything that affects your bills, bank account, and bottom line. Subscribe here: thehill.com/newsletter-signup.

Today’s big deal: Consumer prices rose 7 percent for the year to December, the highest increase since 1982, according to Labor Department data. We’ll also look at a recent report detailing the major problems millions of taxpayers experienced last year, and concerns ahead of the upcoming tax return season.

For The Hill, my name is Aris Folley, and I will fill in Sylvan Lane on the finance team. write to me at afolley@thehill.com or Tweet embed. You can reach Sylvan at slane@thehill.com or Tweet embed.

Let’s go to it.

Inflation has risen to its highest level since 1982

Consumer prices rose 7 percent from the year to December, an increase that the Labor Department said on Wednesday was the highest since 1982.

The division’s Consumer Price Index (CPI), which measures inflation in consumer goods and services, rose 0.5 percent in December alone, still a smaller jump from the previous two months.

  • Officials described increases in the price of shelter and used cars and trucks as “the biggest contributors to the increase of all seasonally adjusted items.” Rising food prices were also identified in the latest report as a prominent contributor to inflation, although the 0.5 percent increase last month was lower than in recent months.
  • Prices for furnishings, home operations, clothing, new vehicles and medical care also rose in December, while auto insurance rates and entertainment prices fell, just as in the previous month. Energy prices fell 0.4 percent in December after a series of increases. Gasoline and natural gas prices also fell.
  • The new inflation report adds to the list of challenges facing President Biden as his administration has sought to promote the strong strides the economy has made amid the country’s ongoing recovery during the pandemic in the face of rising prices.

Biden said the latest inflation data showed his administration was “making progress in slowing the rate of price increases,” but acknowledged that more work was needed to bring costs down to American families.

“Inflation is a global challenge, and it is showing up in nearly every developed country as it emerges from pandemic recession,” Biden said. “America is fortunate to have one of the fastest growing economies – thanks in part to the US bailout – that enables us to tackle high prices and maintain strong and sustainable economic growth. This is my goal and I am focused on reaching it every day.”

The Biden administration has taken steps to ease supply chain bottlenecks at ports and trucks in order to keep costs down.

The Hill’s Morgan Chalfant has more here.

Today’s Driving

IRS watchdog ‘extremely concerned’ about upcoming filing season

National taxpayer attorney Erin M. Collins, chair of the IRS internal oversight body, shares concerns about the upcoming filing season In the last report of her office It details the major problems that millions of taxpayers have experienced last year.

“There is no way to color the year 2021 in the tax administration,” Collins wrote in her office’s 2021 annual report to Congress, which was released early Wednesday. “The year 2021 has not presented a shortage of taxpayer problems.”

  • The report found that tens of millions of taxpayers experienced delays when it came to filing returns, many of which it said “translated directly into refund delays,” with less than 80 percent of individual taxpayers receiving refunds.
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