The reassuring message from the US authorities that the inflation that accompanied the early stages of the post-pandemic recovery would be temporary in nature can no longer be sustained in light of the October data. The consumer price index (CPI) rose that month to 6.2%, reaching its worst figure since 1990, due to the increase in the prices of gasoline and food, as well as the increase in rents. If the trend started at the end of spring and consolidated in summer continues, inflation will remain high next year, complicating an outlook marked by the global production and distribution crisis.
The CPI increased almost one point (0.9%) in October, double that of September (0.4%). In terms of year-on-year inflation, the percentage registered in October was 6.2%, the highest since November 1990, and almost one point more than that observed in September (5.4%). In summary: the worst data in three decades, according to the statistics of the Department of Labor published this Wednesday.
Especially noteworthy is the incidence of inflation in food. Food prices experienced an annual increase of 5.3% in the tenth month of the year, seven tenths more than in the previous month. The so-called underlying price index, or inflation hard, which excludes the often volatile categories of food and energy, was up 4.6% in October from a year earlier and more than 4% in September – the largest increase since 1991.
Bad news for President Joe Biden, who, like the Federal Reserve, had been insisting that the rise in inflation was a direct consequence of the expansionary phase of consumption experienced this spring thanks to the government’s stimulus plans and progress of vaccination, and that theoretically it was called to moderate until stabilizing around 2%, the forecast of the Federal Reserve (Fed, central bank of the United States). That horizon seems more distant today and most analysts believe that it will not be possible at least until well into next year.
In fact, the Fed made it clear at its last meeting last week that inflationary risk was a serious threat, announcing the start of reducing its $ 120 billion asset purchase program at the end of this month. at a monthly disconnection rate of 15,000 million.
President Biden has reacted immediately to the release of the data. “Inflation hurts the pockets of Americans and reversing this trend is one of the main priorities for me,” he said, according to the statement released by the White House. The president has maintained his cautious optimism by pointing out that, regarding energy prices, “in the few days since the data for this report was collected [el balance de octubre], the price of natural gas has dropped ”. Wishful thinking before a reality that is less and less friendly.
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