Inflation in the US reaches a new maximum: 9.1% annual in June

First modification: 07/14/2022 – 04:06

A complex decision. The consumer price index in the United States soared 9.1% in the past year, the biggest annual increase since 1981. Half of the increase was due to rising energy costs.

American families are affected because a part of their income goes to essential products such as transportation, housing and food. But with goods and services rising faster than median incomes, the vast majority of families have seen their daily routines suffer.

For Marcia Freeman, a 72-year-old retiree living on a pension, there is no escaping rising expenses. “Everything goes up, even the cheapest items, like store brands,” said Ella Freeman, who this week visited a food bank near Atlanta, the Georgia state capital, to try to rein in food spending. her.

The Federal Reserve is making the fastest rate hikes in three decades, hoping to curb rising prices, borrowing and spending by consumers and businesses.

The US economy contracted in the first three months of the year, and many analysts believe the trend continued into the second quarter. “The Fed’s rate hikes are doing what they’re supposed to do, which is kill demand,” said Megan Greene, chief global economist at the Kroll Institute. “The trick is if they kill too much and we have a recession,” she added.

Inflation in that country exploded as consumers unleashed a spending spree in 2021, which had been pent up during the pandemic, motivated by big federal aid, low borrowing costs and the savings they had accumulated while sheltering from the virus.

Families channeled their purchases into household items such as furniture, appliances and exercise equipment. So supply chains got stuck and product prices skyrocketed. Russia’s war against Ukraine has spiked energy and food prices.

In recent months, as fears have mounted, consumer spending has been gradually shifting from goods to services. But instead of curbing inflation by lowering the prices of goods, the cost of furniture, vehicles and other items continue to rise, while prices at restaurants, rentals and other services are also getting more expensive.

with AP