Inflation and consumer prices rose at the fastest pace in 39 years from the beginning of the year to December, marking the seventh consecutive month of inflation above 5% and a new sign that inflation continues to weigh on them. Americans consumers.
The Bureau of Labor Statistics (BLS) reported on January 12 that the Consumer Price Index (CPI), which reflects inflation from a consumer perspective, rose 7,0 percent in the 12 months to December, an unprecedented level. since June 1982. when it reached 7,2%.
"This, 7, is not a lucky number," Bankrate chief financial analyst Greg McBride told The Epoch Times in an email, noting that inflation "far exceeded growth". wages of most Americans and squeezed the purchasing power of households. "
A separate government report showed that real average hourly earnings, adjusted for inflation, fell 2,4% in the 12 months to December. Without adjusting for inflation, average hourly earnings rose 4,7 percent during the year.
"Nominal inflation accelerated on an annual basis, reaching 7%, but slowed on a monthly basis for the second consecutive month due to falling energy and slower increases in food prices," McBride said.
On a monthly basis, the CPI inflation rate increased by 0,5% in December after jumping 0,8% in November, indicating a slight easing of inflationary pressures.
However, so-called basic consumer prices, which relate to volatile food and energy categories, have continued to rise at an alarming rate. Structural inflation rose 5,5 percent year-on-year through December, the fastest pace in nearly 31 years.
"Significant increases were made in the categories of food and housing, with the usual suspects used vehicles increasing by 3,5%, clothes by 1,7%, home furniture by 1,1 percent and new vehicles increasing by by 1 percent, all just in December. ", Said McBride.
The CPI's annual inflation is now over 5 percent for seven consecutive months, well above the Fed's 2 percent target.
Charlie Bilello, CEO of Compound Capital Advisors, said on Twitter that he believes the real rate of inflation is being underestimated.
"Housing is the only major component of the CPI (33 percent of the Index) and is extremely undervalued (+4,1 percent) with rents rising 17,8 percent last year (highest annual increase ever) and house prices up 19 percent (also the largest annual increase ever). "Real inflation is much higher than 7 percent," he wrote.
In response to rising inflation and the continuing tightening of the labor market, the US Federal Reserve has called for a moratorium on emergency pandemics and to normalize monetary policy.
The Fed now has a 74,4 percent chance of raising interest rates by 25 basis points in March, according to CME Fed Watch.
