Expert explains if we can invest our way out of inflation
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According to the US Labor Department, December saw the consumer price index rise by 0.5 percent. The increase meant that in December, annual inflation was pushed up by 7 percent, the highest increase since June 1982.
In a press release from the Bureau of Labor Statistics, they said the US’ surge in inflation was due to rising prices across all consumer costs.
The Government body noted increases “in the indexes for shelter and for used cars and trucks were the largest contributors to the seasonally adjusted all items increase”, while the energy index decreased for the first time in months.
The Bureau then shared “the all items index rose 7.0 percent for the 12 months ending December”, the largest increase since “the period ending June 1982”.
In their figures, the US has seen the cost of energy rise 29.3 percent in the year-long period, which the cost of food rose by 6.3 percent.
The Consumer Price Index (CPI) measures the change in prices paid by consumers for goods and services, and is based on prices of day-to-day living.
Speaking ahead of the reports release, Jen Psaki, White House Press Secretary told reporters on Tuesday the Government anticipated “elevated inflation”.
She said: “We certainly anticipate — forecasters generally expect elevated inflation tomorrow, especially for the year-over-year measure, which includes high inflation from nearly a year ago, when the economy was reopening.
“This in part reflects the fact that we continue to see consumer price increases for used cars. We just saw record-setting inflation in Europe.
“I would note that their headline inflation is actually above us and has been for the last several months.
“And so we expect month-over-month inflation to moderate in the months ahead.
“And forecasters generally expect the year- over-year measures to come down to more historically typical levels by the end of the year.”
She then added: “We continue to press for steps in working with Congress to (address the continued rise in inflation) — to do exactly that: to lower costs for the American people. That’s why we want to get Build Back Better done.”
On Friday, Mr Biden said it was “malarkey” to claim he does not care about inflation, and defended his economic record as the US performed below expectations.
In a speech at the White House, the President hit back at Republican claims he had not done enough to tackle inflation or supply chain issues.
He said, referencing his American Rescue Plan, which Congress passed in March without a single Republican vote: “They want to talk down the recovery because they voted against the legislation that made it happen.”
However, a November Washington Post-ABC News poll found 70 percent of voters rated the economy negatively, and around half of voters blamed the President for inflation.
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