December 5, 2023

Taylor Daily Press

Complete News World

US inflation has risen to 7 percent, the highest since 1982

US inflation has risen to 7 percent, the highest since 1982

Bad news for President Joe Biden

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Inflation in the United States continued to rise, to 7 percent year-on-year in December. This is the highest level in 40 years, according to the US Department of Labor.

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So, on average, the price of consumer goods has increased by 7 percent in a year. This is bad news for the Biden administration because it affects the purchasing power of many Americans. Higher inflation puts pressure on the central bank to intervene by raising interest rates. This is expected in March, which is helped by the economic recovery.

The annual inflation rate of 7 percent is in line with analysts’ expectations. Monthly inflation was 0.5 per cent, slightly higher than the expected 0.4 per cent.

Excluding high volatile food and energy prices, inflation stood at 5.5 per cent year-on-year and 0.6 per cent per month. That too was more than expected.

In December, housing and especially used vehicles became more expensive in the United States. Food prices continue to rise. Energy, the driver of inflation for about 2021, became slightly cheaper in the last month of the year. On an annual basis, energy prices were up 29.3 percent and food prices were up 6.3 percent.

Earlier this week, Jerome Powell, chairman of the Federal Reserve in the US Senate, pledged to take action if inflation persists. He also said the US economy was recovering quickly from the Corona crisis. Unemployment fell to 3.9 percent in December, not far from pre-crisis levels (3.5 percent). Up to three tariff hikes are expected in the US this year.

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Stock markets did not warn of high inflation on Wednesday: the Dow Jones Industrial Average was up half a percent on Wall Street.