Inflation in the United States continued to rise and stood at 7 percent year-on-year in December. That’s the highest level in nearly 40 years, the US Department of Labor said.
So, on average, consumer goods have become 7 percent more expensive in barely a year. That’s bad news for the Biden administration because it’s affecting the purchasing power of many Americans. High inflation also puts pressure on the Federal Reserve to intervene by raising interest rates. It is expected in March, aided by the economic recovery.
An annual inflation rate of 7 percent is in line with analysts’ expectations. In addition, monthly inflation was 0.5 percent, slightly above the 0.4 percent expected.
Inflation stood at 5.5 percent year-on-year and 0.6 percent month-on-month, excluding highly volatile food and energy prices. That, too, was more than expected.
In December, housing and second-hand vehicles, in particular, became more expensive in the US. Food prices are also continuing their upward trend. Energy, the driver of inflation for almost all of 2021, became slightly cheaper in the last month of the year.