Prices have spiked during the recovery from the pandemic recession as Americans have ramped up spending on goods such as cars, furniture and appliances.
Gas prices, while declining a bit from November to December, have surged in the past year because Americans have driven more in recent months after having cut back on travel and commuting earlier in the pandemic.
The Labor Department reported Wednesday that excluding volatile food and gas prices, so-called core prices surged 0.6% from November to December, slightly more than the 0.5% increase from October to November.
Measured year over year, core prices jumped 5.5% in December, the fastest increase since 1991.
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.
The Fed's quick pivot hasn't quelled questions from many former Fed officials, economists and some senators about whether the Fed has acted too slowly to end its ultra-low-interest rate policies in the face of accelerating inflation and put the economy at risk as a result.
In his testimony to Congress on Tuesday, Powell said the Fed mistakenly believed that supply chain bottlenecks that have helped drive up the prices of goods wouldn't last nearly as long as they have.
Once the supply chains were unsnarled, he said, prices would come back down.
In the meantime, many restaurants have been passing some of their higher labor and food costs on to their customers in the form of higher prices.
Rick Cardenas, the company's president and chief operating officer, said those higher prices have yet to reduce consumer demand.
