US prices rising at fastest rate for 40 years

• Inflation reached 9.1 percent in the year ending in June, up 1.3 percent from May alone.
• The US inflation rate has increased from 8.6 percent in May to its current level, highest since 1981.
• It used $5 trillion (£4.1 trillion) in stimulus measures to protect people’s homes and businesses.

According to the most recent data, prices in the US are rising at their quickest rate in more than 40 years as a result of the continued high cost of food and gasoline.

The rate of price growth, or inflation, reached 9.1 percent in the year ending in June, up 1.3 percent from May alone, according to the Labor Department.

Last month, the cost of gasoline in the US averaged above $5 per gallon, setting new records.

Predictions have been made that the US central bank will raise interest rates again this month.

The numbers show that the US inflation rate has increased from 8.6 percent in May to its current level, which is the highest since November 1981.

Also Read

Oil prices increase after dropping 3% the previous session

Brent crude rises 0.8%, to $109.86 a barrel by 0012 GMT. Prices...

A move in consumer spending from commodities to services was expected to help reduce inflation, but the fierce competition for labour has resulted in higher wages, which have fueled further price increases.

Since late last year, prices in the US have increased as a result of Covid’s disruption of the supply chain and higher food prices brought on by extreme weather. The conflict in Ukraine has also increased commodities costs across the board.

Some economists have also attributed the acceleration of price hikes to President Biden’s Covid expenditure plans. It used $5 trillion (£4.1 trillion) in stimulus measures to protect people’s homes and workplaces from the pandemic’s economic blow.

The Biden administration, whose support has decreased as inflation surges, attempted to downplay June’s price increases earlier this week by pointing out that the costs of petroleum and other commodities have since dramatically decreased.

Quincy Krosby, chief equity strategist at LPL Financial, disagreed, stating that the remarks showed that the administration’s supporters’ worries had grown.

Nobody anticipated a print higher than 9 percent, he continued.

The US central bank is anticipated by the financial markets to increase interest rates once again to control rising prices at its meeting in a fortnight.

It increased its benchmark interest rate by three quarters of a percentage point to a range of 1.5 percent to 1.75 percent last month, marking the largest rate increase in almost 30 years. It is expected to increase rates in July by a similar amount.

Despite the worries, Mr. Krosby claimed there were indications that inflation in the US was “near to peaking or plateauing.”

The global supply chain problems “appears to be improving at the margin, which should lead to costs coming down,” he added. “We’re starting to see prices come down in commodities, freight and shipping.”

Also Read

US consumer confidence is at a 15-month low due to rising food & fuel prices

US consumer confidence reached its lowest level in more than a year...