According to a White House official, the recent inflation in the country could last for quarters, not months. This jump in prices of goods and services is the highest in the past 13 years.
Fact: Inflation has increased every month since President Biden took office.
— Rep Tim Walberg (@RepWalberg) July 13, 2021
The surge in inflation spiked up to 5.4%, the highest in the past 13 years
According to a report last Tuesday, the recent surge in inflation could last for some time. However, the White House claimed that the spike in prices will clear up after the extensive disruption in the supply chain starts to dissipate.
The White House also reported that the prices of goods and services is at its highest in the past 13 years. This fueled concerns that it could result in a rapid rebound in the economy, which could lead to delinquent growth.
On the other hand, the Labor Department mentioned in their monthly report that prices of consumer goods rose to 0.9% from May and over the past year, it rose to up to 5.4%.
The core inflation, except volatile oil and gas prices, spiked to up to 4.5% in the past year. This is the highest inflation rate since November 1991.
Meanwhile, the rise in consumer prices has coincided with the stonger than expected recovery of the COVID-stricken American economy.
Thanks to the rush of stimulus checks, people are eager to start spending again and splurge on goods from new clothing to vacations and more.
Biden admin: the increase in prices could last for quarters instead of months
However, the Biden administration predicts that the increase in prices could last for quarters, instead of months.
They also believe that the spike in the inflation rate is already at its highest in some sectors. Included among them is the sale of used cars; these prices soared up to 10.5% in June. This is the largest increase, by far, since January 1953.
😮🔥 CPI: "The index for used cars and trucks rose sharply for the third consecutive month, increasing 10.5 percent in June. This was the largest monthly increase ever reported for the used cars and trucks index, which was first published in January 1953" https://t.co/x1ZfgEG5Ac
— 𝑖𝑎𝑠𝑒𝑟𝑔 (@iaserg) July 13, 2021
On the other hand, Jerome Powell Chairman of the Federal Reserve downplayed the rise in prices of services and goods.
They blamed it on the wave of demand among consumers and increase on supply shortages, as more vaccinated Americans start their post-pandemic lives. However, Powell added that the inflation become higher and more persistent than expected.
Meanwhile, concerns among investors are that the spike in inflation could force the federal government to start pulling back the huge monetary support that it’s giving to the economy.
U.S. Central Bank policymakers are still contemplating on how to handle the conflicting economic data. For example, the inflation in the country is here, yet job growth is slower with still 9.5 million Americans unemployed.
Federal officials collectively voted to put interest rates to near zero. The deliberation was made during their policy-setting meeting last June.
They also committed to keep buying $120 million in bonds every month and show no signs of scaling back.