United States | Inflation increases to 9.1 %, the highest value since November 1981

(Washington) Prices in the United States soared again in June, with inflation hitting 9.1%, the highest since November 1981, and increasing pressure on President Joe Biden, who has been called to protect the purchasing power of the United States trade households.

Posted at 8:40am
Updated at 9:26 am

Julia Michele
Media Agency France

This high inflation, which threatens growth as consumption is the main driver of the US economy, is weighing on the popularity of the American president just months before the congressional elections.

According to the Consumer Price Index (CPI) released by the Labor Department on Wednesday, inflation had already risen by 8.6% in the previous month.

In June, the price increase in June was 1.3 % compared to 1.0 % in May.

The consumer price index, which is designed to better reflect core inflation which excludes the most volatile sectors such as energy and food, recorded a 5.9% increase in June 2022 compared to June 2021.

This is higher than expected as a consensus of analysts polled by Bloomberg expected inflation to be 8.8% over the year and 1.1% over the month.

The price hike is affecting all sectors, the Labor Department said in its statement, with the biggest contributors being housing, petrol and food.

Energy prices in particular increased by 41.6 % in the year and thus recorded the strongest increase since April 1980.

According to the United States Energy Agency (EIA), the average price of gasoline in the United States exceeded $5 a gallon last month, an unprecedented level in the country. .

This price increase on the petrol pump has become a symbol of the general price increase.

Food prices have recorded the strongest increase since February 1981 and rose by 10.4 %within one year.

containment of demand

Excluding food and energy prices, which are more volatile and have risen sharply, notably due to the war in Ukraine, so-called core inflation accelerated to +0.7% in just over a month from +0.6% in the previous two months.

However, the core inflation calmed down to 6.0 % compared to May in comparison to May.

Aside from housing, the products and services that rose the most in June were cars and trucks (new and used), healthcare spending and auto insurance.

Vacation rentals and airline tickets were among the few goods or services that were refused.

Shortly before the index was published, the White House had tried to prepare the ground, his spokeswoman Karine Jean-Pierre said: “We expect the number of inflation of the last month, mainly because the petrol prices in June rose so much” .

The US Federal Reserve started in March to raise interest rates aggressively in order to dampen the demand and calm the increasing prices.

This renewed sharp rise in the exchange rate is likely to prompt the monetary institute to raise key interest rates again, after raising them by three-quarters of a percentage point in June, the sharpest increase since 1994.

That door-opener to even tighter monetary policy in the United States caused the euro to fall below the symbolic $1 threshold, not exceeded since December 2002.

Leave a Comment