ROUNDUP / USA: Inflation rises to its highest level since 1982
The New York Statue of Liberty. New York is the stock exchange metropolis of the United States. pexels.com
WASHINGTON (dpa-AFX) – The rise in prices in the USA accelerated further from a high level in December. Consumer prices rose by 7.0 percent compared to the same month last year, as the Department of Labor announced in Washington on Wednesday. This is the highest inflation rate since 1982. Analysts had expected this development. In November the rate was 6.8 percent.
Compared to the previous month, consumer prices rose by 0.5 percent in December. An increase of 0.4 percent was forecast here.
The core rate, which does not take into account volatile energy and food prices, rose slightly more than expected. Here the annual rate increased from 4.9 percent in the previous month to 5.5 percent. Economists had expected 5.4 percent.
Consumer prices increased for most goods. Compared to the previous month, only energy prices fell slightly. Oil prices had recently fallen. The prices for used and new cars rose particularly sharply. Prices also increased significantly for some services such as hotel accommodation.
The overall rate is thus even more clearly above the Fed’s inflation target of two percent. The US Federal Reserve wants to end its bond purchases by March to support the economy. Some Fed members have already signaled an initial rate hike for March.
“The good news is: In the coming months, the US inflation rate will go into reverse, even without the intervention of the US Federal Reserve,” writes Thomas Gitzel, chief economist at VP Bank. The decreasing base effect in energy prices alone ensures this. “So the question is not whether inflation rates will fall, but at what levels they will settle.”
Dirk Chlench, an economist at the Landesbank Baden-Wuerttemberg, expects a clear easing of the price front. For this year he expects an inflation rate of 5.0 percent. “However, since the US monetary authorities have given up their position of dismissing the high inflation rates as a temporary phenomenon, we are now expecting four US borrowing increases for the current year, each by a quarter of a percentage point.”
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