As the cost of living surges, it is difficult for Americans to make ends meet. Inflation in the United States has indeed gone down within two consecutive months because of the sharp price fall. Despite the reduction in the price of petrol, the rates of other items surged higher than before, in august. It indicates that Americans will remain under the burden of inflation, mainly due to household items.
If we talk about the consumer prices that have surged to 8.5% compared with August last year, it would be a two-decade high inflation rate of 9.1% in July. We, after this comparison, can say that every month the inflation has risen 0.1% in July.
Core prices, excluding the volatile food and energy categories, have jumped to 0.6 percent from July to August, but it is hoped that the core prices have begun to moderate. After the completion of a year in August, core prices have risen to 6.3 percent from 5.9 percent in July. However, in August, Rents, medical care services grew more expensive.
One can estimate where costs have headed more precisely than overall inflation. It has also tumbled stock index figures that have worsened than expected core figures. Many investors became more fearful that the federal reserve would increase the interest rates faster in its strategy to curb inflation.
Wall Street has experienced its worst day in two years, which worried investors’ hope that the Fed would make some relaxation in rate hikes.
High inflation never before
Many Americans have never experienced such high inflation before this, putting pressure on the Fed. It is also expected that the central bank will likely announce the increase in its benchmark interest rates next week, and ultimately it would lead to higher costs for many business loans and consumers.
According to economists, it is expected that it could take two years or more to get back to normal. Moreover, rent, medical, and other services will rise in the coming months.
Stimulus package and republicans
However, in the midterm congressional elections, republicans have sought to make a central issue. The stimulus package, which has a 1.9 trillion amount and was announced by president Biden was passed last year, was also blamed by them. Many economists give the reason for the Russian invasion of Ukraine behind this inflation, which is a crucial reason behind such a price hike.
Prices of the goods are still rising remarkably before the authorities are heading to adjust this inflation. This inflation has also increased as many people move out on their own. So, this shortage of availability of these houses has also forced more people to keep renting, which has further intensified the competition for apartments.
This price hike is high for several reasons, including the Russia-Ukraine war, the pandemic effect, climate change, and the relationship between China and the United States. The government is trying to control this inflation, and hopefully, it will be successful soon.