September 30, 2022

SHSU Houstonian Online

Read all latest news headlines from USA, UK and around the world, get today's breaking news and live updates on politics, elections, business, sports, economy,​ …

Families shrink as U.S. consumer prices rise;  More pain is coming

Families shrink as U.S. consumer prices rise; More pain is coming

  • CPI rose 0.8% in February
  • Petrol accounts for almost a third of the increase in CPI
  • The consumer price index is up 7.9% year-on-year. The cost of food and rent will increase
  • Core CPI increased by 0.5%; Increases by 6.4% per year

WASHINGTON (Reuters) – US consumer prices rose in February, forcing Americans to dig deeper into paying rent, food and petrol, and inflation is expected to rise further as Russia’s war on Ukraine cuts crude oil and other commodities.

The broader price hike announced by the Labor Department on Thursday led to the biggest annual inflation in 40 years. Inflation chased the economy ahead of the Russian invasion of Ukraine on February 24, and this could tarnish the image of President Joe Biden.

The Federal Reserve is expected to start raising interest rates next Wednesday. With inflation almost four times higher than the US Federal Reserve’s target of 2%, economists expect a seven percent increase this year.

Sign up now to get unlimited access to Reuters.com for free

Registration

Low-income families are hard hit by high inflation because they spend most of their income on food and petrol.

“Consumer shock at the rapid rise in pump gas prices will continue to put pressure on the Federal Reserve and policymakers, and anything must be done to reduce the rate of inflation everywhere,” said Chris Sockerelli, chief executive of the Investment Authority. Chris Chuckrelli. Charlotte, Coalition of Independent Advisers in North Carolina.

Reuters graphics

The consumer price index rose 0.8% last month, up 0.6% in January. The 6.6% recovery in petrol prices accounted for almost a third of the increase in CPI. Petrol prices fell 0.8% in January. The price of food increased by 1.0%, while the price of food consumed at home increased by 1.4%.

See also  Online traffic - Lufthansa does not count on easing US travel ban before Christmas

Prices of fruits and vegetables have risen sharply since March 2010, while prices of dairy and related products have risen to levels not seen in almost 11 years.

In the twelve months to February, CPI rose 7.9%, the largest year-on-year increase since January 1982. This marks the fifth consecutive month of annual CPI measurements in the United States, following a 7.5% increase in January. The CPI rise of 6% in February was in line with the expectations of economists.

Last month’s CPI data did not fully reflect the rise in oil prices following the outbreak of war in Ukraine. Worldwide Brent oil prices peaked at more than 30% after hitting a high of $ 139 a barrel in 2008, then relaxed again on Thursday and traded at $ 112 a barrel.

The United States and its allies have imposed tough sanctions on Moscow, and on Tuesday Biden banned Russian oil imports into the United States. Russia is the second largest exporter of crude oil in the world.

According to AAA data, U.S. gasoline prices averaged $ 4,318 a gallon, up from $ 3,469 a month earlier.

Biden acknowledged on Thursday the difficulties Americans face from skyrocketing prices, but blamed Russian President Vladimir Putin’s actions.

“As I said from the beginning, there will be costs at home when we impose sanctions in response to Putin’s foolish war, but the Americans can see, and the costs we are imposing on Putin and his allies are far more devastating than the costs,” Biden said in a statement.

Rising inflation is canceling wage increases. According to the Department of Labor, inflation-adjusted average hourly wages fell 2.6% year-on-year in February. According to Moody’s Analytics estimates, inflation cost the average family $ 296.45 a month in February, up from $ 276 in January.

Economists expect the annual CPI rate to be above 8% in March or April and will start slowly in the coming months as higher measurements from last spring pull out of the bill.

Shares on Wall Street were low. Dollars (DXY.) Earned against the basket of coins. U.S. Treasury revenue has soared.

Economic inflation

Higher rental costs

The shift in costs from services to goods and government aid during the COVID-19 epidemics triggered trillions of dollars in inflation. As the spread of the corona virus drove millions of workers out of the labor market, the increase in demand from manufacturers was met by capacity restrictions.

Excluding volatile food and energy components, CPI rose 0.5% last month, after rising 0.6% in January.

A 0.5% increase in the cost of accommodation such as rent, hotel rooms and hostels is more than 40% of the so-called basic CPI increase. Rental costs have increased by 0.6%, the highest since March 2005. Rental costs are fixed and keep CPI high.

Daniel Vernassa said: “The index lags behind other indicators such as the Zillow Observed Rent Index as rent models in the CBI and are revised every six months. , Chief Economist at UniCredit, London.

Consumers paid more for home furniture and activities, auto insurance, clothing and personal care. A sharp drop in corona virus infections increased travel demand, leading to a 5.2% increase in air fares.

See also  Gas prices have fallen further due to an increase in ships carrying LNG from the United States

But prices for new cars have risen slightly, while used cars and trucks have fallen, indicating a decline in their demand. Automobiles are also one of the main drivers of inflation due to the global semiconductor shortage.

In the twelve months to February, the core CPI rose 6.4%, the largest year-on-year increase since August 1982, after rising 6.0% in January.

Despite high inflation, austerity and conflict in Ukraine, the recession was not expected. Labor demand is strong, with 11.3 million jobs created by the end of January. Families have about $ 2.6 trillion in extra savings.

Ryan Sweet, chief economist at Moody’s Analytics in Westchester, Pennsylvania, said: “Consumers have high costs. Is.

A separate report from the Department of Labor for the week ended March 5 showed that the initial state unemployment benefit claims increased from 11,000 to 227,000, which is a seasonal adjustment, but they are in line with the tight labor market.

Sign up now to get unlimited access to Reuters.com for free

Registration

(Closing) Lucia Muttigani Editing Shizuo Nomiyama & Paul Simao

Our criteria: Thomson Reuters Trust Principles.