Business cycle The exceptionally sharp rise in prices slowed in the United States: inflation was still faster than expected

Inflation has been accelerating for some time, especially strong demand growth and supply bottlenecks.

Consumer prices the rise in inflation in the United States slowed in April, according to data released by the Department of Labor on Wednesday.

The inflation rate was 8.3 per cent when it in March it was 8.5 per cent. Inflation has been fueled in particular by strong demand growth and supply bottlenecks. As a result, consumer prices in the United States have risen sharply.

According to the news agency Reuters, analysts predict that the inflation rate would have been 8.1 percent in April. However, based on data from April, it appears that the rise in fuel prices may have come to a halt. In April, food prices rose by 9.4 per cent from the same period last year.

Economists closely monitored core inflation was 6.2 per cent, down 0.3 percentage points from March. The effects of energy and food have been removed from core inflation, as they are usually subject to a lot of short-term fluctuations.

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As a result of inflation, purchasing power weakens, as a certain amount of money makes it possible to buy fewer goods and services than before. In addition to wage earners, high inflation is detrimental to companies and investors.

Despite the slowdown, inflation remains exceptionally high, at over 8% in January 1982 before this year.

Of the United States the central bank decided last week to tighten monetary policy by 0.50 percentage points to curb inflation. The decision was a historic one, most recently tightening monetary policy by 0.50 percentage points in one installment in 2000.

At the beginning of June, the central bank will also start shrinking its balance sheet, ie selling the federal bonds and mortgage-backed securities it has bought on the market.

According to the central bank’s price stability target, the inflation rate should average 2% over the long term. Several economists believe the central bank was already late in curbing inflation early in the year.

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“Inflation remains strong, reflecting the imbalance between supply and demand caused by the pandemic, higher energy prices and broader price pressures,” the Central Bank’s Open Market Committee, which decides on monetary policy, said in a statement.

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