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Inflation in the United States reaches its highest point in the last 30 years
The cost of living for Americans has skyrocketed in recent hours, this is how the year-on-year inflation rate has closed in October at 6.2%.
This figure has been the highest recorded in the country in the last 30 years, as reported by the US Bureau of Labor Statistics.
This increase has been reflected in some products such as food, cars, fuel and housing where their prices have increased caused by this historical inflation. An increase that clearly causes growing concern for consumers.
With this new increase in inflation in the United States, consumers can see their purchasing power is decreasing. Some of the products that have increased their prices the most compared to the others have been eggs, fish and meat, while gasoline prices reached their highest levels in the last seven years.
It has been seen how inflation has been accelerating as the economy recovers from all the effects caused by the Covid-19 pandemic, which is increased by the consumption of the population and bottlenecks remain in the supply chains that affect what is the normal flow of products globally.
After knowing these data that have alarmed the American population, President Joe Biden has reacted immediately and has assured that reducing inflation is one of his main priorities right now.
Factors that have caused the increase in inflation
One of the main factors that has helped this increase in inflation has been the shortage of workers that exists right now, this situation has caused an increase in wages in some main sectors of the economy.
This is how the senior economist of the consultancy S&P Global Ratings, Elijah Oliveros-Rosen, has said that the inflationary jump has been influenced by the prices of energy products, as well as the traffic jams in the global flow of products and the high value of the households.
He also added: "It is very likely that energy prices will continue to rise in the coming months, but as this happens, the impact of bottlenecks in supply chains should be lessened".
On the other hand, Americans have also made their concerns known with this increase in inflation, this is how a waitress from New Orleans, Bessy Clarke has said that she has been noticing the increase in the price of gasoline on a constant basis, every week, go up a little more.
"Before I used to spend 23 dollars to fill my car tank, now I am spending 30 dollars to fill it. Lately I am thinking about how to limit my trips" added Bessy Clarke.
American Clarke also spoke about increases in food when a purchase is made, "even in the restaurant where I work, the prices of meats have been going up, and now we have to pass those prices on to consumers".
Main consequences of rising inflation in the United States
Not only will r also spoke about increases in food when a purchase is made, "even in the restaurant where I work, the prices of meats have been going up, and now we have to pass those prices on to consumers" hat Thought-out.
The Deputy Manager of Investment Strategies of the financial services company Falcom Asset Manager, Hugo Osorio has commented that "this is a complication for the Fed".
It has also been known that the agency in charge of the monetary policy of the United States, has announced an increase in the interest rate for next year and in parallel it has begun a gradual reduction of its multimillion-dollar program for what will be the purchase of bonds launched to support the economy after the crisis caused by the pandemic.
Due to inflationary pressures, the agency could advance the rate hike, this would be an action that would directly influence financial markets and the global economy, which has caused many market expectations.
The Fed's goal for now is to be able to get close at some point to the objective of being able to keep inflation in a flexible range of around 2%. Osorio added "All this about the increase in inflation is very worrying, but it is necessary to remain calm, because it is not an indication that we will begin to see a permanent escalation".
Likewise, the Fed thinks that inflationary pressures are transitory, which would clearly justify a decision not to anticipate a rise in the increase in money. However, not all economists are so positive, this is how many others argue that this increase in inflation will be more permanent.
Following the record rise in prices, Wall Street fell slightly, while the dollar strengthened.