![]() ![]() On Tuesday, Chair Jerome Powell told Congress that the Federal Reserve is prepared to accelerate the interest rate hikes it plans to begin this year if it deems it necessary to curb high inflation. grocery stores have also grown more acute in recent weeks as new problems, like the Omicron variant and severe weather, have compounded the supply chain struggles and labor shortages that have plagued retailers since the coronavirus pandemic erupted. With new car production restrained by shortages of semiconductors, consumers have snapped up used cars, forcing up their costs. Used car costs rose 3.5 percent from November to December and have soared more than 37 percent compared with a year ago. Polls show that inflation has started displacing even the coronavirus as a public concern, making clear the political threat it poses to President Joe Biden and congressional Democrats.Ī significant portion of consumer inflation is still being driven by pandemic-driven mismatches between demand and supply. Rising prices have wiped out the healthy pay increases that many Americans have been receiving, making it harder for households, especially lower-income families, to afford basic expenses. Measured year over year, core prices jumped 5.5 percent in December, the fastest such increase since 1991. The Labor Department reported Wednesday that excluding volatile food and gas prices, so-called core prices surged 0.6 percent from November to December, slightly more than the 0.5 percent increase from October to November. Gas prices, while declining a bit from November to December, have surged in the past year, in part because Americans have driven more in recent months after having cut back on travel and commuting earlier in the pandemic. Those increased purchases have clogged ports and warehouses and exacerbated supply shortages of semiconductors and other parts. Prices have spiked during the recovery from the pandemic recession as Americans have ramped up spending on goods such as cars, furniture and appliances. Inflation jumped in December at its fastest year-over-year pace in nearly four decades, surging 7 percent and raising costs for consumers, offsetting recent wage gains and heightening pressure on President Joe Biden and the Federal Reserve to address what is increasingly Americans' central economic concern. Above, an Olive Garden restaurant in New York's Times Square. Those higher prices have not yet decreased consumer demand, said Rick Cardenas, Darden's president and chief operating officer.Īs consumer costs have surged in the past year, Olive Garden's parent company expects to raise food prices by 4 percent over the next two quarters. The company said that it raised prices by 2 percent during the quarter. Gene Lee, Darden's CEO, recently told investors that this is "the toughest inflationary environment we've seen in years." While the company's food and beverage costs rose 9 percent during the quarter, hourly wage costs also grew 9 percent as Darden tried to lure workers with higher pay. This includes Darden Restaurants, which owns such brands as Olive Garden, LongHorn Steakhouse, Yard House, Bahama Breeze and Seasons 52, according to the company's website. ![]() Many restaurants and restaurant companies have sought to offset soaring prices for labor and food by raising prices for customers, which many appear to be willing to pay. The move is meant to help compensate for the company's 9 percent quarterly spike in food and beverage costs driven by growing inflation. As overall consumer prices have continued to surge, the CEO of Olive Garden's parent company predicted that it will raise food costs at its restaurants by 4 percent over the next two quarters. ![]()
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