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Inflation at its highest in 39 years, a headache for Joe Biden

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The price increase amounted to 6.8% last month compared to November 2020, after + 6.2% in October, according to the consumer price index (CPI) released Friday by the Labor Department. It’s the biggest increase since 1982. And Americans continue to pay more for everything from food and clothing, to cars, gasoline, electronics and airline tickets.

: Inflation is out of control under Democrat leadership “,” text “:” This morning’s numbers confirm what every American family already knows: Inflation is out of control under Democrat leadership “}}” >This morning’s numbers confirm what every American family already knows: Inflation is out of control under Democrat leadership, reacted the powerful Republican leader in the Senate Mitch McConnell, in a press release.

As last month, strong consumer demand has again come up against supply problems linked to the pandemic and it is the prices of the energy sector that have increased the most over one year (+33.3%) .

Excluding the volatile energy and food sectors, inflation also remains strong (+ 4.9%).

Even before November’s inflation figures were released, Joe Biden warned on Thursday that prices had stuck students in November.

But he was quick to downplay its significance, stressing that it did not reflect not today’s reality, highlighting the drop in energy prices in recent weeks, after the collection of data published on Friday.

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In addition, these data do not reflect the price drops expected in the weeks and months to come, as in the automotive market, he also assured.

New car prices jumped 11.1%, used car prices 31.4% last month.

A persistent inflationary surge

Compared to the previous month, the recorded price increase slowed slightly: + 0.8% against + 0.9% in October. But it is higher than analysts’ projections (+ 0.6%), a sign that inflation is persistent.

In addition, the investigation was carried out before the emergence of the Omicron variant of COVID-19, which poses a new threat to the US and global economy.

Some economists anticipate an exacerbation of the logistical problems linked to new sources of contamination around the world, which could accentuate the inflationary surge.

After arguing that inflation was temporary and linked to the economic recovery from the historic 2020 recession sparked by the COVID-19 pandemic, the Biden administration and the US central bank have come to admit that inflation is more sustainable than expected.

For the Republican opposition, Joe Biden’s economic policy of injecting trillions of dollars into the economy has contributed to the inflationary surge, which his administration denies.

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Last month, in the face of criticism even in his Democratic camp, Mr. Biden assured that his top priority was to reverse the trend. But the task turns out to be much more difficult than expected.

The price of gasoline at the pump has already started to fall nationwide and is now below the 20-year average in 20 states, said Joe Biden.

Natural gas prices this week are 25% lower than their November average, he said.

Used car prices will drop, he says In the coming months.

The surge in car prices is directly linked to the global semiconductor shortage. But several large automakers have recently signaled that they are able to produce at full capacity again, paving the way for price normalization.

This report is released a few days before the Federal Reserve (Fed) meeting is held. The institution will publish new economic forecasts on Wednesday, including that of inflation.

It must also announce an acceleration in the reduction of its monetary aid program to the economy to raise key rates in an effort to contain inflation.

The Federal Reserve currently expects inflation to decelerate in the second half of 2022.

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