The U.S. inflation rate is at its highest level in 40 years and shows no signs of slowing down, new data revealed on Wednesday, APA-Economics reports citing CBC.
The Consumer Price Index rose by 0.5 per cent in December alone, the U.S. Bureau of Labor Statistics reported, enough to push the annual inflation rate to seven per cent for the first time since 1982.
The figure was in line with what economists were expecting, but up from the previous 40-year high of 6.8 per cent in November.
Higher prices for shelter and for used cars and trucks were the largest contributors to the increase. Prices for used vehicles went up by more than 37 per cent last year. Prices are up mostly because a global shortage of semiconductor microchips has slashed the number of new cars that can be produced, which has caused many buyers to scramble to find used ones instead.
After being a major contributor to the upside for several months, energy prices decreased by 0.4 per cent in the month, as the price of gasoline and natural gas both came down from highs. On an annual basis, however, energy prices are up by about 29 per cent, and gasoline in particular has increased by almost 50 per cent.
The high inflation rate presents a conundrum for policy-makers at the U.S. Federal Reserve, who are bent on keeping interest rates low to help stimulate the economy due to the COVID-19 pandemic. But all that cheap lending is causing the price of just about everything to jump.
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