Inflation has reached the sky not only in India but in the whole world at this time. In the US, inflation has broken the record of four decades. There the US consumer price inflation index grew at an annual rate of more than seven percent in December, the highest since June 1982. The Bureau of Labor Statistics released these figures on Wednesday. It had risen 6.8 per cent in November.
According to a report by CNN, inflation is increasing in the country due to increasing demand and lack of supply. The US Central Bank may hike interest rates this year. An increase in the cost of borrowing will make purchases expensive. For the third month in a row, annual inflation in the US has risen by more than 6 percent. This is more than three times the Federal Reserve’s inflation target of 2%.
Why is inflation rising
Excluding food and energy costs, inflation grew at a rate of 5.5 per cent between December 2020 and December 2021, the biggest jump since February 1991. This is even higher than in November when core inflation rose by 4.9 per cent. The food price index also rose 6.3 per cent, while the grocery price rose 6.5 per cent.
The Energy Cost Index has risen 29.3% in the last one year. However, this is also less than the 1980s. In the spring of 1980, inflation in the US reached 14.8 percent. This time in December, prices rose 0.5 per cent on a monthly basis. This is slightly higher than the economists’ estimates. Along with housing, the biggest reason for the increase in inflation in December was the role of used cars and trucks.
Fruits and vegetables are the most expensive
Food costs rose 0.5 per cent on a monthly basis in December. Prices rose in all major grocery categories, but fruits and vegetables were the biggest gainers. However, it was a matter of relief that energy cost declined by 0.4 per cent in December. It has declined for the first time since April 2021. But it is expected to accelerate again in 2022.
You can read the stories of Economic Times for excellent articles related to more than 20 sectors of business and in-depth information related to the industry. Click here to read the informative information of Economic Times.