A key inflation measure rose at the fastest pay in 40 years

By Anneken Tappe, CNN Business

(CNN) -- A key measure of inflation rose 5.8% between December 2020 and December 2021, the Bureau of Economic Analysis reported Friday.

It was the biggest advance since 1982.

Energy prices alone rose nearly 30% over the course of 2021, while food prices climbed 5.7%.

Stripping out those two components, the core consumer price index -- which is the Federal Reserve's preferred measure of inflation -- rose 4.9% in the 12 months to December. That was the fastest price hike by that measure since 1983.

For the month of December alone, prices rose 0.4% -- a decline from the 0.6% in both October and November. Core prices advanced 0.5%, the same amount as in November.

While prices rose, so did American incomes -- albeit at a slower pace. Personal incomes increased by 0.3%, or $70.7 billion in December, while disposable incomes increased only 0.2%, or $49.9 billion.

Americans also spent less in December, and consumer spending actually declined for the first time in months.

Retailers had warned customers of supply chain disruptions and shortages, effectively pulling the holiday shopping season into November.

This is a developing story. It will be updated

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