inflation picks up again in January, to 7.5% over one year

inflation picks up again in January, to 7.5% over one year

Inflation continued to accelerate in January in the United States to reach 7.5% over one year, its fastest pace for almost 40 years and more than expected, but the rise in prices nevertheless remains stable on a month.

As of Wednesday, the White House had hinted that the inflation figures would still be bad in January. We have to go back to February 1982 to find such high annual inflation, according to the consumer price index (CPI) published Thursday by the Labor Department.

Over one year, energy prices have increased by 27%, and food prices have risen by 7%. The rise in consumer prices over one month was 0.6%, as in December, the data for which was nevertheless revised slightly upwards. The ministry attributes this new acceleration in particular to the prices of food, electricity and housing.

Food prices climbed 0.9%

Food prices increased by 0.9% in January against 0.5% in December. Energy prices also increased by 0.9%, the rise in electricity prices having however been partially offset by the decline in gasoline and natural gas prices, the ministry said. Excluding the volatile energy and food sectors, so-called core inflation recorded the same rise over one month as in December, by 0.6%, and accelerated over one year, to 6 .0%.

Furniture and decoration items, used cars, medical care and clothing are among the items whose prices rose the most in January compared to December, the ministry said. In 2021, inflation had reached 7%, its highest level in almost 40 years. Monthly inflation, however, had slowed from November (0.5% vs. 0.8%), notably as rising energy prices slowed for the first time in months.

The Republican opposition as well as economists believe that this is the direct consequence of the economic policy of Joe Biden, who had Congress vote last year for a gigantic emergency plan of 1,900 billion dollars. But the price spike is also the result of a combination of pandemic-related factors, including supply chain issues, component shortages and labor shortages.

Thus Brian Deese, Joe Biden’s economic adviser, repeated on Wednesday that inflation was a “global phenomenon“. He maintains that this will moderate when consumer spending shifts towards services rather than goods.

.

Comments

0 comments

Leave a Comment

Your email address will not be published.