An inflation index carefully tracked by the Federal Reserve rose 6.1 percent in January compared to a year ago, providing further indication that Americans are facing steep price rises that are likely to intensify following Russia’s invasion of Ukraine.
The Commerce Department recorded the greatest year-over-year increase since 1982 on Friday.
Strong consumer spending, combined with significant product and labour shortages, has resulted in the biggest inflation in four decades. a significant hardship for US households, particularly lower-income families facing increased food, fuel, and rent prices
At the same time, consumers as a whole mainly ignored rising prices last month, increasing their spending by 2.1 percent from December to January, according to Friday’s report, a promising indication for the economy and the labour market.
This was a significant improvement over December, when expenditure decreased. Americans of all income levels have received salary hikes and have saved more money than they did before the pandemic arrived two years ago. This increased savings pool provides fuel for future spending.
Inflation, though, is expected to remain high and perhaps accelerate in the coming months, especially with Russia’s invasion likely disrupting oil and gas exports.
The costs of other commodities that are produced in Ukraine, such as wheat and aluminum, are rising, too.
President Joe Biden said Thursday that he would do everything I can to keep gas prices in check.
Biden did not spell out details, though he mentioned the possibility of releasing more oil from the nation’s strategic reserves. He also warned that oil and gas companies should not exploit this moment? by raising prices at the pump.