Consumer prices of USA increased further in November as the cost of goods and services rose sharply amid supply constraints, leading to the biggest annual gain since 1982. The number may encourage the Federal Reserve reduce your bond purchases more quickly.
The consumer price index (CPI) rose 0.8% last month, after rising 0.9% in October, informed the Department of Labor this Friday (10).
In the 12-month period up to November, the IPC increased by 6.8%. That was the biggest year-on-year increase since June 1982, followed by a 6.2% increase in October. Economists polled by Reuters predicted the CPI would rise by 0.7%.
The report followed last week’s news that the unemployment rate it dropped to 4.2% in November, a 21-month low.
The tightening of labor market conditions was highlighted by a report released on Thursday (9) showing that new claims for unemployment insurance fell to the lowest level in over 52 years last week.
Other data this week showed there were 11 million job openings at the end of October and Americans resigned at near-record rates.
The tight job market is boosting wages and salaries. bottlenecks in the offer are showing little signs of easing, indicating that the rally inflation can persist until 2022.
“With the supply shortage likely persisting into next year and service sector prices tending to rise, inflation will get worse before it gets better,” said Sam Bullard, senior economist at Wells Fargo in Charlotte, North Carolina.
The Fed Chairman, Jerome Powell, said the US central bank should consider accelerating the liquidation of its massive bond purchases at its policy meeting next Tuesday and Wednesday. Many economists are expecting an early rise in Fed interest rates.
Excluding the volatile components of food and energy, the CPI rose 0.5% last month, after gaining 0.6% in October. The so-called core CPI jumped 4.9% year-on-year, after rising 4.6% in October.
The Fed tracks the personal consumption expenditure (PCE) price index, excluding the volatile food and energy components, to its flexible target of 2%.
The PCE core rose 4.1% in the 12 months to October, the highest since January 1991. November data will be released later this month.
“A continued upward trend in core inflation creates more hawkish risks [política monetária contracionista] for a Fed that has recently become more focused on the inflation side of its tenure and suggests a growing likelihood of an even earlier rate hike,” said Veronica Clark, economist at Citigroup in New York.
Reference: CNN Brasil
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