Jimu News reporter Song Qingying
Intern Zhao Wenbo
According to Associated Press reported on July 13, while the prices of daily necessities such as gasoline and food in the United States are soaring, the prices of house rents, cars, and tourism are also rising. Inflation in the United States appears to have reached a 40-year high in June.
U.S. oil prices (Source: Associated Press)
A government report showed that consumer prices rose 8.8% in June compared with the same period last year, which would be the largest annual increase since December 1981. According to the latest statistics from
, gasoline prices have dropped to an average of $4.66 per gallon in July from $5 per gallon in mid-June, but this figure is still much higher than a year ago. In addition to volatile food and energy prices, other commodity prices rose by 0.6% for the third consecutive month in June and by 5.7% year-on-year.
Such a significant price increase has caused the cost of many necessities to skyrocket, severely impacting the living expenses of most families. Low-income black and Hispanic households in the United States fare even worse, with items like gas and food taking up a larger share of their daily expenses.
Over the past year, as the epidemic has improved, the U.S. government has stimulated the economy, which has led to a surge in people's purchase demand, causing tension in the supply chain and causing prices to soar. With the recovery of tourism and entertainment industries, prices of hotels, cars, house rentals, etc. are also rising.
Price increases have caused consumers to lack confidence in the economy, causing Biden 's support rate to plummet, which in turn has brought major political risks to the Democratic Party. According to one poll, 40% of U.S. adults say fighting inflation should be a top priority for the Biden administration this year, up from 14% in December.
Continued inflation makes the Federal Reserve very uneasy. Last month, the Federal Reserve announced an interest rate hike of 0.75 percentage points, the highest rate in nearly three decades. The interest rate is currently in the range of 1.5 to 1.75 percentage points.
The Federal Reserve is likely to announce another significant interest rate hike in two weeks to raise interest rates, reduce consumer and business spending, and slow inflation. High inflation could prompt the Federal Reserve to sharply raise its benchmark short-term interest rate again.
Some economists worry that the Fed's rush to curb inflation could lead to raising interest rates too quickly, triggering a future recession.
The Federal Reserve predicts that inflation may slow in the second half of this year, but the exact extent is not yet known.
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