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U.S. inflation was 5.8% for 2021, highest since 1981

By Doug Cunningham
U.S. inflation was 5.8% for 2021, highest since 1981
Jerome Powell speaks after U.S. President Joe Biden announced that he will serve a second term as the Federal Reserve Chair in the South Court Auditorium at the White House in Washington, DC on November 22, 2021. The Fed plans to hike interest rates in 2022 to combat inflation. File Photo by Yuri Gripas/UPI | License Photo

Jan. 28 (UPI) -- U.S. inflation was 5.8% for 2021 as measured by the core PCE, or personal consumption expenditures index. The annual number is the highest since 1981.

Measured by the Consumer Price Index, inflation was an even higher 7% for 2021.

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Inflation rose 4.9% in December according to the core PCE. The Commerce Department said the increase for that month was the highest since September 1983.

That core PCE index is the one preferred by the Federal Reserve. It excludes food and energy.

The December number was an increase of 0.5% over November.

Inflation was even higher for 2021 according to the Consumer Price Index, another measure of inflation that uses a weighted average of prices

The Labor Department's Bureau of Labor Statistics said the employment cost index also increased 4% over the past 12 months, the fastest increase since that data set began in 2002.

Wages and salaries increased 4.5% for 2021, while benefits costs were up 2.5%, according to the Bureau of Labor Statistics.

The Federal Reserve is planning to raise interest rates later this year in an effort to combat the inflation.

According to CNBC, "market pricing is pointing to five quarter-percentage-point increases this year for benchmark short-term borrowing rates."

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Those rates have been near zero since the beginning of the COVID pandemic in early 2020.

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