United States | Inflation rises to 9.1%, the highest 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.

On a monthly basis, the price increase was 1.3% in June 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.

In particular, energy prices rose 41.6% year-on-year, the sharpest 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 at the pump has become a symbol of the general price increase.

Food prices rose the most since February 1981, rising 10.4% in a 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, for the year as a whole, core inflation eased to +5.9% versus 6.0% in 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 release of the index, the White House tried to prepare the ground, its spokeswoman Karine Jean-Pierre stating: “We expect last month’s inflation numbers to be very high, mainly because gasoline prices rose so much in June.” .

The US Federal Reserve began aggressively raising interest rates in March to dampen demand and calm rising prices.

This renewed sharp rise in the exchange rate should prompt the monetary institute to raise key interest rates again, after having already raised 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