WASHINGTON D.C.: In November, U.S. consumer prices rose at their fastest rate in nearly four decades, highlighting the inflationary pressures on the recovering American economy.

According to Bloomberg data, the Labor Department's Consumer Price Index (CPI) rose 6.8 percent in November, in line with economists' estimates, but higher than the 6.2 percent year-over-year rate from the previous month.

The CPI rose by 4.9 percent, compared to 2020, the fastest increase in some three decades, even excluding more volatile food and energy prices.

In an email reported on Yahoo News, Greg McBride, chief financial analyst at Bankrate, said, "Inflation is outpacing increases in household income and weighing heavily on consumer confidence, which is at a decade low."

Contributions to the CPI last month were wide-ranging, but price rises in gasoline, housing, food and both new and used vehicles were some of the largest contributors.

Energy prices were up 3.5 percent in November over October, rising for the sixth consecutive month, while gas prices were up 6.1 percent, matching October's increase, and the gasoline price index was up about 58 percent over last year, its highest 12-month increase since 1980.

During the month, grocery store prices also increased, with an index tracking food at home gaining 0.8 percent in November over October.

For investors, the noticeable surge in prices suggest the Federal Reserve may need to become more proactive in reining in inflation.

In the past few weeks, Fed Chair Jerome Powell stressed that it might be appropriate to speed up its asset-purchase tapering program, in the face of rising price pressures and firming economic conditions.
In an email, Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said, "Inflationary pressures are building in the economy and that is going to force the Fed's hand."

"The economy is continuing to grow at an above average pace, but inflation is also increasing much more quickly than we have experienced in decades, so we are at an inflection point," he added.