Investors brace for the highest inflation reading in nearly 40 years

If the consensus is correct, the last time inflation was this high was in the early years of the Reagan administration – as the U.S. found itself amid a steep and persistent recession.

The Labor Department on Friday morning will release November’s consumer price index, a gauge that measures the cost of dozens of items. The index covers common goods including gasoline and ground beef, but extends into more detailed purchases such as frozen vegetables, indoor plants and flowers and pet supplies.

Wall Street expects the the index to reflect a 0.7% gain for the…