- BBC News World
The cost of living for Americans has skyrocketed.
The year-on-year inflation rate in October was 6.2%, the highest figure in the country in 30 years, the US Bureau of Labor Statistics reported on Wednesday.
The food, fuel, cars and housing are some of the products whose price increase drove this historical record.
Rising inflation has been a growing concern for consumers who they see their purchasing power diminish.Products such as meat, fish and eggs rose more than other foods, while gasoline prices they reached their highest levels in the last seven years.
Inflation is accelerating as the economy recovers from the effects of the covid-19 pandemic, population consumption increases, and bottlenecks persist in supply chains that affect the normal flow of products globally.
After knowing the inflationary data, the president of the United States, Joe Biden, assured that reducing inflation is one of your “top priorities.”
One of the factors that has contributed to the increase in inflation is worker shortage, a situation that has raised wages in some sectors of the economy.
In a dialogue with BBC Mundo, Elijah Oliveros-Rosen, senior economist at the consulting firm S&P Global Ratings, says that the inflationary jump “was influenced by the prices of energy products”, as well as the bottlenecks in the global flow of products and the high value of the houses.
“Energy prices are likely to continue to rise in the coming months, but at the same time, the impact of bottlenecks in supply chains should lessen,” he adds.
American Bessy Clarke says she has noticed the rise in the price of gasoline.
“Steadily, every week, it goes higher and higher.” He used to spend $ 23 to fill his pond, he explains, and now $ 30.
“I’m thinking about how to limit my travels,” says the waitress from New Orleans, who has also seen how the food price when you make the purchase.
“Even in the restaurant where I work, meat prices have gone up and now we have to pass that price on to consumers.”
In addition to raising the cost of living for ordinary citizens and making business operations more expensive, the record inflation adds pressure on the US Federal Reserve (Fed) to raise prices. interest rates ahead of schedule.
“This is a complication for the Fed,” Hugo Osorio, Deputy Manager of Investment Strategies at the financial services company Falcom Asset Manager, tells BBC Mundo.
The body, in charge of the monetary policy of the world’s largest economy, has announced an increase in interest rates (the cost of money) for next year.
In parallel, it has begun a gradual reduction of its multi-million dollar bond purchase program launched to support the economy after the crisis caused by the pandemic.
Market expectations are that, due to inflationary pressures, the agency could advance the rate hike, a movement that directly influences financial markets and the global economy.
For now, the Fed’s goal is get closer to your goal of keeping inflation in a flexible range of around 2%.
“The increase in inflation is worrying, but we must be calm, because it is not an indication that we will see a permanent escalation,” argues Osorio.
The Fed believes that inflationary pressures are “transitory”, which would justify your decision not to advance an increase in the cost of money.
Nevertheless, other economists are skeptical and argue that the rise in inflation will be more permanent.
The news of the inflation figure caused a slight fall on Wall Street and a strengthening of the dollar.
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Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.