Why is US inflation so high – and how long will it last?

Inflation in the US is at a 40-year high - an astounding 9.1% year-over-year, according to a government report released Wednesday.

Prices have climbed every month, while consumer confidence has hit record lows. Inflation is now a top concern for many Americans, and is likely influencing many voters in a midterm election year.

What is driving this inflation, however, is not new: rather, it is largely the fallout of two years of the Covid-19 pandemic. Here is what we know.

The Covid-19 pandemic strapped the US economy on to a rollercoaster. In early 2020, nationwide lockdowns caused millions of Americans to be temporarily laid off from their jobs. Then president Donald Trump responded by signing a $2tn aid package aimed at directly helping businesses and individuals, including stimulus checks that put money directly into people's pockets. It would ultimately be the first of three stimulus packages, together pumping an eye-watering $5tn into the economy.

That summer, businesses slowly started to reopen. But it would take another year and a half for the unemployment rate to fall back to where it was before the pandemic, and with wages rising due to a tight labor market, consumer spending started to climb: people wanted new homes, restaurant meals, appliances and furniture.

As the demand for goods soared, supply remained constrained - because of the infamous supply chain crisis, which is only just now starting to ease. At the peak of the crisis, ports were clogged with ships trying to dock, containers were falling into the ocean and there was a shortage of truck drivers. The war in Ukraine, along with China's own coronavirus lockdown in the spring of this year, also played roles in keeping supply tight during 2022. That means higher prices.

Gas, food and housing prices have all soared, according to the US Bureau of Labor Statistics. Year-over-year, gas prices are up 7.5% - though Joe Biden has called the inflation rate "out-of-date", as gas prices have been falling the last few weeks.