CA Inflation Again Hits Record: 'No Sign Of Easing'

CALIFORNIA — Prices on everything from groceries to gasoline have risen to their highest point in 40 years, placing a major strain on those who live in California — one of the nation's most expensive states to live.

President Joe Biden and Gov. Gavin Newsom have vowed to alleviate the effects of inflation, but many Californians are adapting to an unrelenting state of sticker shock.

The Labor Department reported Wednesday that a measure of inflation that excludes volatile food and gas prices jumped 5.5 percent in December over the same month a year earlier, the highest increase in decades.

Nationally, overall prices rose 0.5 percent from November, which was down 0.8 percent from the month before, according to data released Wednesday by the Bureau of Labor Statistics.

Although inflation was relatively high last year, the current price increase was less than similar increases observed in 2020, when prices rose 0.8 percent from October to November.

Supply chain snags spurred by the ongoing pandemic remained the major contributors to increasing prices in 2021. Most economists have said inflation won't sink back to prepandemic levels for quite a while.

"U.S. inflation pressures show no sign of easing," said James Knightley, chief international economist at the financial services company ING. “It hasn’t been this high since the days of Thatcher and Reagan. We could be close to the peak, but the risk is that inflation stays higher for longer."

Businesses struggling to hire have hiked pay, but rising prices for goods and services have eroded those income gains for many Americans. Lower-income families have felt the pinch the most, and polls showed that inflation has started displacing even the coronavirus as a public concern.

Inflation was also particularly troubling in a state like California, where residents tend to bear the brunt of spiking prices, although increases vary by region.

Here's a look at where prices stood on both ends of the state in December.

In the Los Angeles, Long Beach and Anaheim area, prices overall rose by 4 percent in December compared with the same month a year ago.

Food prices increased 7 percent during 2021, while prices for food at home inched up 8.1 percent. Energy prices surged 33.9 percent during 2021, mostly because of rising gasoline prices.

The price of natural gas service rose 18.3 percent, and the price of electricity shot up 15.5 percent in the region, according to the U.S. Bureau of Labor Statistics

In the San Francisco Bay Area, prices increased 4.2 percent in 2021. Food prices rose 5.2 percent and the index for all items aside from food and energy increased 2.8 percent over the last year.

Energy prices spiked 28.2 percent in 2021 over the previous year because of surging gas prices. The price of natural gas service jumped 27.8 percent; the prices of electricity advanced 9.6 percent last year, according to the labor bureau.

While prices rose across the board, inflation especially bedeviled California's motorists last year and into January.

In the last month of 2021, gasoline of all grades cost Californians an average of $4.59 per gallon, compared with $3.14 per gallon the previous year, according to the U.S. Energy Information Administration.

Nationally, the price of gasoline fell 0.5 percent in December over November after several months of increases.

On Wednesday, Biden issued a statement arguing that the drop in gas prices in December and a smaller increase in food costs showed progress.

For his part, Newsom on Monday proposed a "$523 million dollar gas tax holiday" to halt a gas tax increase set to go into effect in July. Last year, the gas tax in California increased by 51.1 cents per gallon.

"Oil prices are climbing again due [to] civil unrest in a couple of oil producing countries, but that impact seems to be tempered by concerns about what the Omicron variant of Covid may do to gasoline demand," Jeffrey Spring, spokesman for the Automobile Club of Southern California, said in a statement.

READ MORE: CA 'Gas Tax Holiday' Proposed Amid Surging Fuel Prices

The Associated Press contributed to this report.