US inflation ended up seven percent in December, compared with the previous year. Used cars and foodstuffs pulled up inflation the most.
The case is being updated …
It shows recent figures from the US Bureau of Labor Statistics’ statistics wing.
The price increase of seven percent is the highest since June 1982, and completely in line with analysts’ estimates in advance.
Thus, the growth continues from November when inflation was 6.8 percent.
Core inflation, which is stripped of goods that fluctuate widely in price, including fuel, rose by 5.5 per cent, compared with the same month the year before. Here, a growth of 5.4 per cent was expected in advance.
“Omikron may temporarily increase the pressure on commodity prices in the coming months due to delivery challenges, while weaker demand for services may provide a partial relief,” says economist Katherine Judge of CIBC Capital Markets, according to Bloomberg.
Will fight high inflation
The sharp rise in prices has accelerated the phasing out of monetary policy measures following the corona pandemic in recent months. The US Federal Reserve has, among other things, increased the downsizing of support purchases in the market.
Central Bank Governor Jerome Powell assured the Senate on Tuesday night that he will fight high inflation.
“If we have to raise interest rates more over time, we will do it,” he said, according to Bloomberg.
The interest rate in the US is currently 0–0.25 per cent. At the previous interest rate meeting, the Fed signaled three interest rate hikes in 2022.
The Fed chief pointed out that reopening effects and global bottlenecks have led to higher prices, and that high inflation will last well into the middle of the year.
Price jump on food
The largest contributor to the growth in core inflation is used cars, which had a price increase of 37.3 per cent from December the year before.
At the same time, food prices rose by 6.5 per cent. In comparison, the annual growth over the last ten years has averaged 1.5 percent, writes the statistics wing.
The largest increase in food prices came in the category of meat, poultry, fish and eggs, with a growth of 12.5 per cent last year, even with a slight decline in December. The price of dairy products, on the other hand, rose by only 1.6 per cent, which was the weakest category in food.
In the same period, the price of restaurant food has risen by six per cent, which is also the largest growth since 1982.
US grocery stores are currently short of more food on store shelves. The spread of the omicron variant and bad winter weather in recent weeks have contributed to the food shortage, on top of already existing problems in the supply chain and problems with labor shortages, NTB wrote on Wednesday morning.
In the total consumer price index, energy prices also contribute a lot to growth. Inflation on energy products was 29.3 per cent in December, compared with the previous year. A jump of 48 per cent in fuel prices in particular is contributing to growth here.