Inflation in the United States is now at its highest rate in 31 years, according to economic experts — and “it won’t get better until it gets worse,” topping out perhaps in January of 2022, before it subsides.
Prices for goods paid by consumers rose by an incredible 6.2% annually in October, coupled with gigantic supply chain problems and shortages of raw materials across the globe.
Gasoline and heating oil prices in the US are spiking at a time when Americans for the most part feel free to travel for the Thanksgiving holiday and are bracing for Winter heating expenses.
The US Labor Department states that the consumer price index is up fully 6.2% over October of 2020, showing the greatest increase since November of 1990.
US inflation “broadening out” across economic spectrum
Greg McBride, the chief financial analyst at Bankrate, told Fox Business that “Inflation is broadening out,” explaining that such large increases are occurring pretty much across the board.
“In addition to food, energy, and shelter continuing to post outsized monthly increases, new and used car prices are once again shifting into overdrive,” he stated.
Even with the US now being a net energy exporter, in part thanks to the practice of fracking for oil, energy prices increased by a whopping 4.8% in October in the leadup to Winter; they are now a staggering 30% more than what they were one year ago, when the nation was still in the midst of partial lockdowns and reduced economic activity.
The rise in energy costs is seen as the result of a 6.1% increase in the cost of gasoline in the US.
Annually, the cost of groceries and other foods consumed at home went up 1% in October; overall, food prices have increased 5.3% annually.
Sam Stovall, the chief investment strategist at the investment group CFRA believes that consumer prices will come to a head in January before subsiding once again.
The prices of goods other than foods and energy in the US saw increases of 0.6% monthly, amounting to 4.6% over the past year, representing an increase of 0.3% over that experts had forecasted for the annual rate of increase.
Brad Armstrong, a partner at Lovell Minnick Partners, stated “We’re seeing early signs of an inflationary surge that’s likely to persist, with companies responding to rising input costs with cost increases of their own, which in turn causes higher input costs for others. It’s a cycle that repeats itself.”
The increase prices for durable goods is partially due to the gigantic bottlenecks for new vehicles, with supply-chain issues stemming from a lack of computer circuit boards being the primary reason why consumers are forced to wait months for the delivery of vehicles.
Prices for used vehicles are also on the rise, as the demand for them skyrockets due to the lack of available new cars. In October, new vehicle prices were a jaw-dropping 9.8% above what they were one year ago; the prices for used vehicles were an astonishing 26.4% over that they were in the same month in 2020.
Housing prices also saw increases over the past year, with a rise of 0.5% during October reflecting a 3.5% increase over 2020.
Earlier in November, the Federal Reserve officially stated that inflation was “elevated” while the agency stated that it would back off on its $120 billion per month of asset purchases. However, officials from the central bank of the US stated that the inflation that is now widespread in the country will be only “transitory.”
Asked by Fox Business interviewers what he thought of the economic and political ramifications for President Biden, senior political analyst Brit Hume replied “Inflation is a really dangerous thing because whatever other gains are made — with wages and so forth– are wiped out by inflation, and it damages your savings.
“As long as interest rates are low it’s going to be hard for people to make the kind of savings gains that they want and need. It’s about as corrosive a factor in American life as one can imagine.”
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