Inflation in the US accumulated in 12 months is at its highest in the last 30 years

A inflation of consumer prices in USA it rose again in October, and has already accumulated in 12 months the highest increase in the last 30 years, according to the Bureau of Labor Statistics (US equivalent to IBGE) this Wednesday (10).

Over the past 12 months, prices have risen by 6.2% – the biggest rise since November 1990.

Excluding food and energy prices, which tend to be more volatile, the index rose 4.6% in the same period, the highest since August 1991.

In October alone, the general price index rose 0.9%, adjusting for seasonal fluctuations, significantly more than economists had predicted (0.6%), and overshadowing the slightly more lukewarm 0.4% rise in September.

Last month’s price increases were caused by increases in several categories, including energy, shelter, food and cars.

Costs with energy have soared in the country, jumping 4.8% in October and 30% in the last 12 months.

pandemic price increases

Rising inflation has been a hallmark of recovery from the effects of pandemic, thanks to a potent combination of unbridled demand, raw material shortages and bottlenecks along global supply chains. And the jump in energy costs is only making things worse.

At the same time, the Biden administration and the Federal Reserve they have been adamant that price increases are temporary and expected as the economy recovers from its worst crisis in a generation.

Last week, the secretary of the Treasury, Janet Yellen, I told CNN that while inflation is high, it is nowhere near as bad as the peak inflation of the 1970s, when the United States was in a state of stagflation, defined by rising prices and slow growth.

What will the Fed do?

The Federal Reserve is starting to put the brakes on its pandemic-era stimulus, starting with reduce the monthly pace of asset purchases. This can take some of the heat off the economy. After all, keeping prices stable is one of the central bank’s main tasks.

But the higher-than-expected October data raises questions that the Fed is acting fast enough or whether it has to reverse stimulus even faster.

Even if a single month does not create a trend and price increases in October may be short-lived, the opposite could also be true.

American consumers are already gearing up for higher prices during their holiday shopping.

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