Tuesday, May 17, 2022

US inflation highest in 40 years, with no letup in sight

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Washington: The Labor Department said Thursday that consumer prices jumped 7.5per cent last month compared with a year earlier, the steepest year-over-year increase since February 1982.

When measured from December to January, inflation was 0.6per cent, the same as the previous month and more than economists had expected. Prices rose 0.7per cent from October to November and 0.9per cent from September to October.

Shortages of supplies and workers, heavy doses of federal aid, ultra-low interest rates and robust consumer spending combined to send inflation leaping in the past year. And there are few signs that it will slow significantly anytime soon.

Wages are rising at the fastest pace in at least 20 years, which can pressure companies to raise prices to cover higher labor costs. Ports and warehouses are overwhelmed, with hundreds of workers at the ports of Los Angeles and Long Beach, the nation’s busiest, out sick last month. Many products and parts remain in short supply as a result.

The latest inflation data suggested to some economists that the Fed could raise its key rate in March by one-half a percentage point, rather than its typical quarter-point hike.


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