The cost of cars, energy and housing have all increased in the US due to inflationary price hikes
Inflation in the United States rose 7% over 2021, an increase not seen since June 1982, the US Department of Labor said Wednesday.
With energy and food prices removed from the equation, the “core” inflation rate in the US was 5.5% in 2021, the greatest rate increase since 1991.
The inflationary pressures on the economy have come with political costs for US President Joe Biden as his administration hopes to steer an economic recovery.
On Wednesday, Biden said his administration had “more work to do with price increases still too high.”
The Federal Reserve is alarmed by inflation as everyday Americans increasingly feel sticker shock on everything from large purchases to basic staples.
The cost of cars, energy and housing have all increased due to inflationary price hikes. Price increases have eaten away at wage gains and polling data shows concerns over inflation even beginning to displace pandemic-related concerns.
According to Labor Department statistics, rental housing prices rose 4.1% last year and food prices jumped 6.3% while used car prices rose 37.3%.
The inflationary pressures, due partly to demand pressures on global supply chains, are expected to continue as long as pandemic-related pressures on workers’ health and supply chains exacerbate matters.
The silver lining is the month-on-month consumer price index slowing to 0.5% in November, suggesting inflation may be nearing its peak.
While Jerome Powell, the Fed chair, once called inflation “transitory,” the US central bank is now expected to raise its short-term benchmark rate three times in the year ahead to tamp down inflationary pressures.
On Tuesday, Powell told the Senate Banking Committee, “If we have to raise interest rates more over time, we will.” – DW.
