America is Seeing the Highest Inflation in 41 Years

America (USA) has had its highest inflation rate in 41 years. Since June 1981, it has expanded at the quickest annual rate. The increase in petrol, rent, and food prices is to blame for this. Data on inflation has been made available by the Bureau of Labor Statistics.

The Consumer Price Index (CPI) rose 9.1% in June over the same month last year, according to the data. Its growth rate earlier in May was 8.6%. It expands at a monthly rate of 1.3 percent.As a result, the Federal Reserve is under more pressure to tighten its monetary policy. That is about five times the Federal Reserve’s 2 percent inflation target.

When volatile items like food and energy prices are excluded, core CPI increased by 0.7 percent from one month to the next and by 5.9 percent from a year ago.

• Energy prices have risen by 7.5 and 41.6 percent in the last month and year, respectively.
• In the month of June, the cost of food climbed by 1%.
• In June, housing prices rose by 0.6 percent, and rents by 0.8 percent.
• Gasoline prices have risen by 60% in the last year and 11.2 percent in the last month.
• Electricity prices increased by 13.7 percent annually and 1.7 percent monthly.
• Prices for new and used cars have risen by 0.7 and 1.6 percent, respectively.

What is the cause of the rise in inflation?

When either supply or demand changes, inflation typically rises. There are numerous explanations offered for why American inflation is on the rise.

Consumers received relief as a result of the government package. Those who lost their jobs due to the outbreak also benefited greatly from this gift. All of these factors raised the demand. Given this demand recovery, supply could not be increased. This demand-supply imbalance ended up being the cause of the increase in inflation.

Officials from the White House have attributed the price increase to foreign nations. But by February, inflation had already started to rise quickly. Joe Biden, the vice president, has urged gas station owners to cut their prices. The demand-supply discrepancy is the second justification. Actually, America’s economy has accelerated due to quick inoculation against the disease. An increase in demand has resulted from this faster-than-expected recovery.