September 12, 2023

INFLATIONARY PRESSURES IN THE U.S PERSIST AS FUEL PRICES RISE

In the following article, it was revealed that consumer prices in the United States experienced a larger-than-expected increase last month. This increase was primarily driven by rising rental and fuel costs in the U.S. economy.

The inflation rate, which measures the pace at which prices rise, stood at 3.7% over the past 12 months through August. This figure marked an increase from the 3.2% recorded in July. These data highlight the challenges faced by authorities seeking to stabilize prices, especially after the rapid increase in inflation seen last year, reaching levels not seen in decades.

Despite the inflation rate having decreased since its peak last year, it remains a concern for authorities as they aim to keep it close to 2%. The U.S. central bank has already raised its benchmark interest rate to the highest level in 22 years, with the goal of reaching a range between 5.25% and 5.5%, in an effort to curb price increases. They are scheduled to meet at the end of this month to consider whether further increases are needed.

The report indicates that fuel prices were the main driver of the rise in consumer prices from July to August. Monthly inflation was 0.6%, the highest since June 2022 up to the present day. This is largely due to fluctuations in fuel prices.

The increase in prices was reflected in various sectors of the economy, including housing costs, which continued to rise for the fortieth consecutive month. Although housing prices were expected to cool off this year, they remain a significant part of the U.S. Consumer Price Index.

This inflationary increase presents challenges for the U.S. Federal Reserve as they seek to balance economic growth with price stability. While it is unlikely that the Fed will raise interest rates at its upcoming meeting, the data could influence future decisions. Federal Reserve Chairman Jerome Powell has reiterated his willingness to raise rates if necessary to control inflation, which he still considers "too high." Controlling inflation remains a key priority in U.S. economic policy.

KEYWORDS :

1. Inflation

2. Consumer prices

3. U.S. economy

4. Rental costs

5. Fuel

6. Inflation rate