US Inflation Reaches 7 Percent, Worst Since 1982

  • Share

Inflation in the United States reached 7 percent last December and hit its highest pace in nearly 40 years, which increased household spending, lowered incomes and confronted President Joe Biden and the Federal Reserve as the greatest threat to the American economy. forced to fight. .

Prices for food, vehicles, fuel oil (BBM) and home furnishings will rise sharply in 2021 as part of efforts to quickly recover from the recession caused by the COVID-19 pandemic.

Widespread subsidies and low interest rates have helped boost citizens’ purchasing power, while vaccination programs have given people the confidence to eat out and travel.

As Americans’ purchasing power increases, supply chains are disrupted by shortages of workers and materials, causing prices for essential commodities to rise.

A senior economist at Nationwide told the news agency: Associated press “Inflation at the end of 2021 is very hot,” he said, adding that prices may drop as supply chain issues begin to unravel. But inflation will still be high in 2022.

The Department of Labor (12/1) reported Wednesday that factors in inflation, excluding volatile food and fuel prices, rose to 5.5 percent last December – the fastest increase since 1991. Inflation rose 0.5 percent, down from 0.8 percent in November. In October.

Nicole Pomije, owner of a bakery in Minnesota, said she’s driving up the prices of cookies because of the rise in prices of butter and other ingredients. The price of pastries, which was usually only 99 cents, and white chocolate chip cookies, which were usually 1 dollar and 50 cents, had to be increased.

On December 10, 2021, a price tag hangs on a shelf at the Dollar Tree Store in Alhambra, California, showing a $1.25 price tag. The store is known for selling items for $1, but recently had to raise prices due to falling inflation. USA.. (Photo: AFP)

“We have to keep making money,” he said. “We are a business, but we do not want to lose our customers. However, I think we may lose customers by raising prices.”

Rising prices have wiped out the gap in salary increases that many Americans receive, making it difficult for many households—especially low-income families—to meet basic needs.

Polls show inflation is starting to be a serious public concern, and the issue is becoming an increasing political threat to President Biden and Democratic members of Congress.

Inflation is still largely driven by the mismatch between supply and demand caused by the pandemic. For example, the price of used cars rose more than 37 percent last year due to restrictions on new car production due to shortages of semiconductors. New car prices rose 1 percent in December after rising 11.8 percent last year.

Clothing costs rose 1.7 percent in December, the second month of the sharp increase, and rose 5.8 percent from a year ago.

Residents breathed a sigh of relief with the 0.5 percent drop in fuel prices in December, but the price was still 50 percent higher than last year.

Most economists expect inflation to decline once the Omicron variant wave passes and Americans shift their spending to services like travel, dining out or watching movies in theaters. This will reduce demand for goods and help reduce pressure on supply chains that are still recovering. [em/jm]

  • Share

Leave a Reply

Your email address will not be published. Required fields are marked *