Prices are rising as a result of the steep increase in energy and food prices, which reflects the effect of the conflict in Ukraine.
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| Wall Street , New York /Unsplash |
Inflation in the United States reached an all-time high of 8.5 percent in March, a level not seen in the previous four decades, as a consequence of high demand, interruptions in supply chains, and increasing energy prices as a result of the Ukraine conflict, according to official figures. According to the statistics, President Joe Biden's political purpose of opposing the heating up of the economy has unquestionably become a political goal, with increasing prices serving as the primary adversary to be defeated. The interannual rate had reached 7.9 percent in February, according to the Federal Reserve.
The consumer price index in the United States increased once more in March, indicating for the first time the impact of the war in Ukraine on the domestic economy, particularly in the cost of gasoline, which reached an all-time high of 4.33 average dollars (3.99 euros) per gallon in March, according to the index (3.7 litres). The report, which was anticipated - most experts were expecting an increase of 8.4 percent year-on-year - solidifies the next increase in interest rates at 0.5 percentage points, which analysts assume will be announced at the Federal Reserve's meeting in May, as predicted. When interest rates jumped 0.25 percentage points in March, it was the first time that the price of money had increased.
Although the increase in the price of gasoline is the primary reason for the increase in the CPI in March, the rise in the price of food and the rise in the cost of rent have also had a significant impact. In its monthly rate, the consumer price index increased by 1.2 percent in March, marking the highest rise since September 2005, according to data released on Tuesday by the United States Bureau of Statistics. Thus, the rate of growth in prices is accelerating: in February, the rate of increase had climbed by 0.8 percentage points.
Core inflation, which excludes volatile energy and food costs, increased by 0.3 percent in March and by 6.5 percent year on year, according to the Bureau of Labor Statistics. This is the form of inflation that causes the greatest concern among specialists because it implies the presence of long-term or structural issues. Regarding the growth in energy and food costs, according to the figures released on Tuesday, they have increased by 32 percent and 8.8 percent, respectively, year on year in the previous year.
With the inflationary suffocation that is being experienced by households – rents have skyrocketed, and even food banks are experiencing shortages as a result of the rising cost of food – Vice President Joe Biden is being forced to fight inflation as a political trump card and as an electoral strategy. In light of the upcoming mid-term elections in November, the Obama administration has taken unprecedented steps, such as allowing the sale of gasoline with higher ethanol content this summer, temporarily lifting a restriction that prevents the sale of the mixture during the hottest months of the year, among other things. According to The New York Times, the change might result in a decrease in the price of gasoline of around 10 cents per gallon.
Among the other initiatives being pursued by the White House is the large-scale release of crude oil from the country's strategic reserves in order to compensate for the disruption of Russian oil supplies and also to stimulate local oil and natural-gas production.