The November consumer price index report issued by the Bureau of Labor Statistics showed an overall increase of 6.8% compared to the same month last year – the greatest increase since 1982. This all but shattered the argument that inflation would begin to slow, or that it would be transitory. The surge was due to rises in everyday items, and the cost of fuel. (The price of these household items is soaring.)

One essential item, however, saw its price plunge an astonishing 58.6%: Food at elementary and secondary schools.

Perhaps the most well-regarded voice about the severe damage rising prices can do to the economy is that of Larry Summers, the former secretary of the treasury and director of the National Economic Council. He has argued that new government stimulus packages, which drive up incomes, could also pour gas onto the inflation fire. (These are the countries with the highest inflation rates in the world.)

 Summers is joined in this school of thought by billionaire investor Bill Ackman, who used the word “raging” to describe the current rise in prices in an interview with Bloomberg. Ackman believes the government figures understate reality.

Inflation has started to color the public’s view of the economy. The University of Michigan’s consumer sentiment index dropped sharply in November almost entirely due to anxiety about inflation. 

The new numbers also indicate that the Federal Reserve faces a daunting challenge. Jerome Powell was just reappointed by President Joe Biden to another term as chairman of the Federal Reserve System’s Board of Governors. This was largely on the strength of the Fed’s work to push a national economic recovery from the COVID-19 driven recession. But can he do just as good a job with inflationary pressures?

The Fed can raise rates in an attempt to tap down rising prices, but higher interest rates could undercut the buying power of many consumers and businesses. Both the stock market and the extremely healthy real estate market could be undermined by a decision to raise rates. 

The November consumer price index report indicated a wide range of price increases by category – but also a number of items whose cost dropped. To find the everyday items that showed a 12-month price decrease in November, 24/7 Wall St. reviewed the report.

Click here to see prices of essential items that are plunging

Among the largest drops were food prices at schools and employee sites, each of which was down over 40% year over year. There is no ready explanation for this, other than many businesses and schools were shut down for much of the period covered. Other regularly used items which posted large drops in prices were smartphones and telephone gear.

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