Cheap watch: US consumer prices have skyrocketed since 1982 | Business and Economic Affairs

Consumers in the United States can be forgiven for feeling like they were pushing for an unpleasant moment, the latest government statistics show that last month’s price hike has risen sharply over the past 40 years.

The Consumer Price Index (CPI), which measures inflation, is up 7 percent in December compared to the same period last year, the U.S. Department of Labor said on Wednesday. This is the worst climb of 12 months since June 1982.

On a monthly basis, CPI rose 0.5 percent in December after 0.8 percent in November.

Rising prices have been a signal of a new economic recovery in the US, as shortages and a lack of equipment and labor increase the value of businesses. Companies also offer some value-added services to their customers.

Reducing prices is particularly difficult for low-income families, who see a significant portion of their income as a result of rising prices, especially on basic necessities such as food, fuel, and shelter.

Of particular concern is the increase in rent, as well as the prices of used vehicles and the significant contribution to CPI surgery in December.

According to a consensus, when food prices rose 0.5 percent last month, they rose sharply than in previous months. And oil prices – which almost half of US households depend on for their energy source – dropped, and oil prices continued for long periods of time.

Depletion of food and energy, which tends to be the most volatile CPI components, and the so-called core index rose 0.6 percent in December, after a 0.5 percent increase in November.

Last year, the average CPI was up 5.5 percent last month – the highest increase since 1991.

Rising prices and interest rates

Falling prices continued sharply until the end of last year, when the US Federal Reserve stopped keeping low interest rates to get Americans back to work and increased the risk of inflation.

At its last policy meeting, the Fed said it was accelerating the rise in bonds – which encourage job growth but rising oil prices by reducing long-term interest rates – and recording at least three pencils for interest rates this year. .

Slow decline is a good thing because it makes the economy more efficient by attracting consumers to stop buying. This is particularly important because consumer spending contributes to two-thirds of the US economic growth.

But extreme inflation is bad, because if prices go up, and in particular – consumers expect to continue to rise – it could cause the Fed to raise prices more aggressively than they expect and pose a financial risk.

In due course a sense of reassurance On Tuesday for the second time as chairman of the Fed, Jerome Powell said he and his fellow policymakers are seeing a rise in inflation in the middle of this year. But he reassured lawmakers that if the Fed saw “inflation continue longer than expected”, it would take action.

“If we have to raise interest rates over time, we will,” he said, adding that “high inflation is a real threat to create more jobs and to achieve the long-term growth that can lead to this.”

Meanwhile, the recovery of the US labor market continues. While the economy added a staggering 199,000 jobs in December, unemployment in the country dropped to 3.9 percent to close to 3.5 percent.

The high number of jobs created has led businesses to reduce wages and benefits for job seekers. The more employees feel confident about their job prospects, the more they are leave their functions in record numbers – often taking on more lucrative responsibilities.

This represents an hourly wage for all employees, up 4.7 per cent in December from the same period last year.