The highest level of US inflation in 40 years

  A sharp rise in consumer prices during the holiday season (AFP)
In the biggest increase since 1982, Inflation in the United StatesLast November, they accelerated compared to the same month last year, while demand collided with consumers The major supply problems caused by the COVID-19 pandemic. 

The price increase amounted to 6.8% last month over a year, after recording an increase of 6.2% in October, according to Consumer Price Index Which was published by the Ministry of Labor on Friday, knowing that these numbers are in line with analysts’ expectations.

On Friday, the White House published inflation data that may reveal a new historical rise in prices, but President Joe Biden previously underestimated the dimensions of these numbers, indicating that they do not take into account the latest economic developments.

Analysts had expected a new increase of 6.8% compared to the same month last year, after recording 6.2% in October, to raise prices in November at the fastest pace in nearly 40 years.

And when President Joe Biden warned since Thursday that prices in November were “high once again”, he was keen to clarify that the report’s data was overtaken by recent developments and no longer reflected “the reality of today.”

He also pointed out that it “does not reflect the expected decline in prices in the coming weeks and months, such as prices in the car market,” out of a tradition that requires the president to refrain from commenting on an economic report before it is officially published.

After the Biden administration confirmed that inflation is “temporary”, and it is linked to the economic recovery recorded after the historical deflation in 2020 as a result of the Covid-19 epidemic, it eventually returned and acknowledged, along with the Federal Reserve, that inflation will last longer than expected, and it affects a wide range of products.

The Republican opposition believes that Biden’s economic policy, which is to pump thousands of billions of dollars into the economy, contributed to inflation, which the administration denies.

And Biden confirmed, last month, in response to criticism from even his Democratic camp, that the “absolute priority” of his administration is to reverse the price trend. But a month later, the task turned out to be more difficult than expected, which raises increasing resentment among Americans who have been facing a rise in their cost of living for several months and are now paying higher prices for everything from food to fuel, through cars and electronic products, and even travel cards.

But Biden emphasized that in the weeks after collecting the data for the November report, “energy prices fell.”

The price of US gasoline is starting to fall

He stressed that “the price of petrol at stations has begun to decline at the national level,” and has become lower than the average for a period of 20 years in twenty states. He added that the natural gas prices recorded this week are 25% lower than the average for the month of November.

And, according to expectations, inflation is likely to slow at a monthly rate to 0.6% compared to November.

Biden also confirmed that used car prices will also decline “in the coming months”, knowing that the rise in car prices is directly related to the shortage in semiconductors due to the confusion in global supply chains in light of the health crisis. But a number of major car companies have recently reported that they may be able to resume production at full capacity, which will pave the way for prices to return to their normal levels.

Next Wednesday, the Federal Reserve will publish new economic forecasts, including inflation expectations. It will also announce the acceleration of reducing the monetary support program for the economy, before it will later increase interest rates during the next year in an effort to contain inflation.

And US Central Bank President Jerome Powell admitted last week, during a congressional hearing, that he misjudged the resilience of the inflationary boom.

He told the Senate Banking Committee: “It may be time to stop using the adjective “temporary” to describe the current inflation, indicating “the increased risks of continued inflation,” while the Federal Reserve now expects that “inflationary pressures will continue for a large part of next year.” to “retreat in the second half” of it.

(France Brush)