In June, consumer purchases saw the highest increase in the last 13 years, which indicates that due to the spread of the coronavirus, the supply of goods in the market decreased while buying increased, which increased the prices of many things and services.
A report issued by the Labour Department on Tuesday shows that compared to a month ago, the prices increased by 9 percent in June, which is 5 percent higher than last year. This is the biggest increase in inflation in 12 months since August 2008.
Meanwhile, petrol prices are seeing an extraordinary increase.
Experts say that inflation rose by four and a half last year, the highest rise since November 1991.
Inflation in the country is rising when the country's economy is recovering rapidly from the effects of the global pandemic, which could lead to the Federal Reserve.
The Federal Reserve and the White House have said the current wave of inflation is temporary. As soon as the supply barriers are removed, the economy returns to normal.
High inflation figures have opened eyes in recent months, but core inflation is still under control, says Gus feature, an economist at PNC financial services. At the moment, prices of some things, such as old cars, plane tickets, rental cars, hotel rooms, etc., are rising, as the global epidemic is slowing down and the economy is moving towards recovery.
But despite this, the policy of lowest interest rates may be affected by the constant high level of inflation. The purpose of this policy is to encourage people to borrow and spend. If this policy is affected by rising inflation, it can blow the process of economic recovery.
The report states that last month, the prices of used cars rose by 10.5 percent, the highest increase since January 1953. The price of new cars increased by 2%, which was the biggest increase since 1981. Similarly, in June, the rent of hotel rooms increased by 7%.,
The prices of goods in restaurants increased by 4.2% compared to last year due to the increase in workers' salaries. Home furniture prices have increased by 8.6% compared to last year.
Mohawk, a carpet and tile maker, has said it is about to increase the prices of its products by 6 to 10 percent, a third-time increase over a year. Similarly, a major American company making spices used in foods, McCormick, has said that it is increasing the prices of its products as it is now getting raw materials expensive.
Americans believe that inflation returns to its old level with time. The Federal Reserve Bank of New York said in a survey released on Monday that inflation could remain at 5% for a year from now. And in three years it will go back to the level of three and a half percent.
The federal reserve believes that inflation will be higher than their target of 2% for some time because this level was below the target during the last 10 years.
However, it is not clear what Federal Reserve officials are in favor of maintaining long-term inflation. Some economic experts believe that despite the current rate of inflation falling by the end of this year, it will be considerably higher than three percent.
In June, the meeting of federal reserve officials could not agree that the country's economy is developing in a better place. They may be entitled to reduce monthly purchases of bonds. The purpose of these purchases is to lower the long-term interest rate and encourage higher borrowing and spending.
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