Inflation hit 7% last year, a record for the twelve months ending in June 1982, according to the Consumer Price Index (CPI) released by the Labor Department on Wednesday.
Joe Biden, however, tried to be reassuring, pointing out that his administration
was making progress in slowing the price increase, according to a statement.
The American president, for whom this soaring cost of living is a major political problem, has nevertheless admitted that he
there was still work to be done, with prices still too high and which squeeze household budgets.
In particular, gasoline prices have climbed by almost 50% in 2021, and those of used cars by more than a third. Food prices have also increased, but to a lesser extent.
For the month of December alone, however, prices rose less quickly than in November, at 0.5% against 0.8%, in particular because the rise in energy prices slowed, for the first time in years. month.
The Republican opposition, which accuses the Democratic president of an inflationary policy with too much spending, lambasted what it now calls the
Wages are shriveled up by Bidenflation. And Joe Biden doesn’t seem to care that Americans can’t afford anything anymore, from gasoline to groceries., tweeted the Republican Party.
These figures should put a little more lead in the wing of the social and environmental investment plan of the Democratic president,
Build Back Better, already paralyzed in the face of fears that this spending will fuel inflation.
The year 2021 was marked by very strong pressures on the global supply chain, with shortages of certain components which pushed up prices.
Labor shortages in the United States also slowed production and delivery, and employers raised wages to attract job applicants, passing these cost increases on to their customers.
Like the White House, many economists expected these sharp price hikes to be only transitory, and to subside as the supply chain got back on its feet.
But the return to normalcy takes longer than expected, and inflation has now become public enemy number one.
Omicron could make matters worse
Persistent supply chain bottlenecks, against a backdrop of high demand, will keep the inflation rate high at least until the first quarter, anticipates Kathy Bostjancic, chief economist for Oxford Economics.
The Omicron variant could contribute to further increase prices, since the large number of contaminations forced employees to go into quarantine, de facto slowing down production and delivery, in particular.
Ian Shepherdson, economist for Pantheon Macroeconomics, table him on a peak% in January and February “,” text “:” about 7.2% in January and February “}}”>around 7.2% in January and February, before a slowdown in March, and inflation to 4.5% in September.
However, this will remain more than double the objective of the American central bank (Fed), which targets 2% annual inflation, which allows it to have leeway on key rates in the event of an economic hardship.
Its president, Jérôme Powell, who was heard Tuesday by senators, promised to act
Consequently if this record inflation persisted in the second half of this year.
Implication: the Fed is ready to raise its rates more than expected, thus engaging in a balancing act so as not to slow down the recovery in the job market.
In December, unemployment fell to 3.9%, returning to close to its pre-pandemic level (3.5%). But job creation is lagging behind, and inequalities remain very high.