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The inflation rate in the US has risen sharply for almost 40 years | Business and Economic Affairs

Personal Expenditure – inflation – rose 5.7 percent in November of the same period last year.

Download your cassette tapes with your Sony Walkman, because the United States economy has a 1980s era.

Personal Expenditure, which reflects the US economy, rose 5.7 percent in November of the same period last year, the U.S. Department of Commerce said on Thursday. This is the worst rise in PCE for almost 40 years.

Compared to the previous month, PCE rose 0.6 percent in November after a sharp 1.4 percent increase in October.

With food and energy expenditure, core PCE rose 4.7 percent in November from the same period last year.

PCE is the most monitored because consumer spending controls about two-thirds of the world’s largest economic growth. It is also the Federal Reserve’s preferred lower inflation rate.

Thursday’s data from Commerce showed that higher prices could be heavier on consumer spending. Americans cut their purchases and spent more money last month, while revenues adjusted for inflation fell 0.2 percent in November from last month.

And even in early October the start of the holiday season could save consumers more money in November compared to October, economists see inflation as a reaction.

“Consumer revenue rose slightly 0.6 percent m / m last month, driven by job losses. But inflation continues to rise in consumer spending because real money was worthless in the face of rising prices,” said Kathy Bostjancic, chief financial officer at US at Oxford Economics.

Much of PCE is expected to explode after the U.S. Department of Labor announced earlier this month that Consumer Price Index it rose 6.8 percent in November – and the largest increase in nearly 40 years.

For many years this year, the Federal Reserve has tolerated rising inflation rates to pave the way for Americans to return to work.

But this year’s inflation caused by the crisis, as well as the shortage of raw materials by workers due to the epidemic has continued even further than the Fed had originally expected.

In addition, although the labor market did not recoup all the jobs lost in the last flu epidemic last year, unemployment was approaching 3.5 percent before the epidemic. The US economy currently has the approximate number of job openings. And workers in America are so self-reliant about their job opportunities that they say “I quit” in the short term.

Economists have been scratching their heads at what led to the decline in workers in the U.S., but things ranging from fears of taking COVID-19, to infants retired early, and workers opening their souls to start their own businesses believed to be the cause. .

In the face of rising market volatility and declining inflation as early as 1982, the Fed this month announced its intention to set monetary policy to begin price controls.

At the end of its annual policy meeting, the Fed said it would work to eliminate the scourge of epidemics and released new predictions calling for interest rates to increase threefold next year.

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