The Greatest Depression The Fastest Since 1981, at 8.5% Through March

Inflation hit 8.5 percent in the United States last month, the fastest for 12 months since 1981, the rise in oil prices in line with the Russian offensive in Ukraine exacerbated the sharp rise caused by strong strikes and declining epidemics. .

Fuel prices have risen sharply across the country and food prices have risen, the labor department said Tuesday in its monthly Consumer Price Index report. Pricing prices have been particularly painful for American families, especially those with limited means and who contribute most of their budgets to basic necessities.

But the news was not just as bad: The rate at which food and fuel prices were cut sharply declined slightly from February when prices for used cars dropped. Economists and policy makers have taken this as a sign that inflation is likely to slow down after a sharp rise over many years.

Instead, several economists said March could be a sign of more water in the fall. Prices may begin to decline in the coming months in part because oil prices have fallen sharply – the average global gallon was $ 4.10 on Tuesday, according to AAA, down from a peak of $ 4.33 in March. Some researchers also expect consumers to refrain from buying too many items, such as furniture or outdoor furniture, which may cause stress on tax chains.

“These figures represent something very significant,” said Gregory Daco, an economist at Ernst & Young’s strategy consultancy, EY-Parthenon. However, he said, it would be important to see prices increase except for food and fuel – the so-called high prices – declining in the coming months.

Rest could be good news for the White House, as inflation has become a major problem for Democrats as the mid-November elections approach. People’s confidence in the economy has plummeted, and rising prices are hampering support for President Biden and his party, which could jeopardize their ability to run for office in Congress.

As inflation rises around the world as the economy changes the way the epidemic unfolds and shares the challenges of society, higher prices have risen sharply in the United States than in places like Europe and Japan.

This has given Republicans a chance to speak, especially as prices rise in recent wages. The average hourly wage rate rose 5.6 percent in March, according to the Department of Labor. But when adjusted for inflation, the average income was 2.7 percent lower.

“American citizens’ wages are very low each month,” Senator Patrick J. Toomey, Republican of Pennsylvania, wrote on Twitter report completed.

Although the Federal Reserve has a major role to play in regulating inflation, regulators have taken steps to curb inflation. Mr Biden announced Tuesday that a ban on the sale of ethanol oil in the summer would be suspended this year, with White House officials saying its aim was to reduce gas prices.

This follows the President’s decision last month to release one million barrels of oil per day from the US Strategic Petroleum Reserve in the next six months.

“I am doing everything I can, in the order of the authorities, to lower prices and address the rising cost of Putin,” Biden said in Iowa on Tuesday afternoon, referring to Russian President Vladimir V. Putin. Inflation peaked sharply before the war in Ukraine, although the conflict has increased pressure on electricity and commodity prices.

There are few indications that inflation is likely to decline in the coming months.

The first one is very fond of machines. Prices started to rise last spring, which means changes will be tested by a number of years ago in the coming months.

Additionally, March data showed that prices for other items, including used cars, accessories or downs – although the brand was not consistent, the prices of furniture are rising sharply. If inflation falls, it could help the overall decline.

“It’s very welcome to see the leadership in the organization,” said Lael Brainard, the Fed’s new governor and nominee for Mr. Biden to be second in command to the central bank, in an online appearance conducted by The Wall Street Journal. “I ‘ll be watching to see if we will continue to see improvements in the coming months.”

Amid the fall in oil prices this month and falling commodity prices, even economists who have long complained of rising commodity prices said they could begin to fall.

“It’s better – than ever – even worse that we will not see more than 8.5 percent this year,” said Jason Furman, a Harvard economist and former chairman of President Barack Obama’s Council of Economic Advisers.

But even if inflation slows slightly, it could be that 2022 is moving further away from the Fed target, which means 2 percent on average using the same but much slower index.

The key question is how do prices fall and how do prices fall, and recent developments increase the risk that inflation may be delayed.

The cost of labor, including rent and other housing, is increasing. Those standards are moving slowly, and should be a major factor in ensuring rising inflation.

Wages are high, which in turn leads to higher costs and which can lead to higher prices. Traders may feel that they have the power to increase the cost of consumer spending, and even to increase their profits, as consumers continue to spend a whole year on inflation.

And cheap things are not guaranteed. The coronavirus epidemic is blocking cities and disrupting production in China, and the war in Ukraine is adding to the uncertainty over commodity prices and chains.

“The cost of these products is deteriorating, it can take time to become economically viable,” said Tim Mahedy, an economist at KPMG US tax and technology company.

In the wake of the long-running downturn, the U.S. central bank is taking action, instead of waiting to see what will happen. Fed officials began raising interest rates last month and have shown they will continue to encourage them “as soon as possible” as they try to lend, spend money and interest, hoping to prevent inflation from becoming a stable US economy. .

“It’s been shocking: We went for a decade that we couldn’t get a 2 percent rise,” Christopher J. Waller, the Fed’s governor, said in a statement on Monday. “We hope it goes quickly, that’s our job, and we’re done.”

Proponents of her case have been working to make the actual transcript of this statement available online. Ms Brainard said Tuesday that such a plan could be announced as soon as possible in May, and will take effect soon in June.

Although she predicted that consumer demand will decline in the coming months as the government provides fewer family support than 2021 and rising mortgage rates, Ms. Brainard cited the Ukrainian war and China’s closure as threats that could reduce inflation and reduce inflation. which is possible.

In a recent Bloomberg financial analyst study, forecasts for average inflation in the last three months of this year were 5.4 percent higher than last year – above the Fed target. Traders and consumers alike tend to argue that rapid inflation is affecting their financial performance, and many are expressing concern that it will not change quickly.

“Even if the economy is shrinking, it will not feel like a shortage for builders, for the people who own the building companies, the automotive companies,” said Crissy Wieck, chief marketing officer for Western Express trucking company. Federal-led group on Monday.

He also noted that motorists often buy cars when they want to ship hot as they do here, attracted by the promise of higher pay – but due to the shortage of cars, renewable energy could last for years.

“Supply chain supply and supply-demand ratios will not change,” he said.

Ben Casselman and Ana Swanson supported reports.

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