Why US inflation is so high, and when it may ease 

Inflation is starting to look like that unexpected—and unwanted—houseguest who just won’t leave.

For months, many economists had sounded a reassuring message that a spike in consumer prices, something that had been missing in action in the U.S. for a generation, wouldn’t stay long. It would prove “transitory,’’ in the soothing words of Federal Reserve Chair Jerome Powell and White House officials, as the economy shifted from virus-related chaos to something closer to normalcy.

But now economists are voicing a more discouraging message: Higher prices will likely last well into next year, if not beyond.

On Wednesday, the government said its consumer price index soared 6.2% from a year ago—the biggest 12-month jump since 1990. Bacon prices are up 20% over the past year, egg prices nearly 12%. Gasoline has surged 50%. Buying a washing machine or a dryer will set you back 15% more than it would have a year ago. Used cars? Twenty-six percent more. 

Consumer price inflation will likely endure as long as companies, dealing with whiplash from the shutdowns and rapid return to standard operations, struggle to keep up with consumers’ prodigious demand. A resurgent job market—employers have added 5.8 million jobs this year—means that Americans can continue to splurge on everything from lawn furniture to new cars. And the supply chain bottlenecks show no sign of clearing. 

Read the full story about how and why inflation is at its peak.