As the epidemic eases across the country and the federal government bailout works, the economy begins to recover and prices are on the rise. Supermarkets began to sell meat at higher prices.
The U.S. economy is growing rapidly after the epidemic hit, but the warning signs of inflation are also flashing desperately. Federal Bureau of Labor Statistics (Bureau of Labor Statistics) data show that the prices of all household goods, natural gas, electricity, etc., have been rising in the past year, the rate of increase is the most in three years; among them, the average price of coffee rose 8%, bread rose 11%, gasoline rose 22%, the era of inflation has arrived.
Data show that food prices have risen by 3.5% and energy prices by 13% over the past year; at the same time, the prices of various commodity raw materials (for example, steel, lumber and cotton) have been soaring; many companies say that the higher cost of these raw materials will be passed on to consumers.
Inflation is rising too fast for the liking of economic experts; because if prices get out of control, the boom is likely to come to a halt; in addition, prices are rising, wages are not keeping up with price increases, and consumers will be hit directly.
One of the government’s tools for measuring price increases is the personal consumption expenditure index (PCE), which rose 3.5 percent in the first three months of this year, the second-fastest increase since 2011 and well above the “2 percent just right” increase; it rose 1.7 percent in the same period in 2020.
Another measure of inflation, the Consumer Price Index (CPI), also grew at a higher rate than experts believe is desirable: 2.6 percent in March compared to the same month last year; the largest year-over-year increase in three years.
With the epidemic easing across the country and federal bailout money working, the economy is starting to recover and prices are on the rise. Prices at gas stations in New York City have also risen.
Prices may be rising because people have just been freed from the depression of the epidemic and have a bailout in hand, and demand is strong.
Due to the significant increase in raw materials, several large companies have decided to increase prices. Consumer goods supplier Bao alkali company (Procter & Gamble) said, due to the rise in cotton prices, before September will increase the price of diapers and feminine care products; appliance manufacturers Whirlpool (Whirlpool) in response to the rising cost of steel, has increased prices by 5 to 12 percent.
Although the Federal Reserve Board (Fed) Chairman Ball (Jerome Powell) claimed he could control inflation and said any surge was temporary, economists at both ends of the political spectrum are predicting that the inflation could be the most painful in decades.
Billionaire Warren Buffett (Warren Buffett) recently said that the economy is in a “hot” state, Congress passed a bailout program and the Federal Reserve Board launched measures to push most economies to “hyper-speed development.
Buffett warned that his conglomerate does see “real inflation”, “we are pushing up prices, and people are accepting this.”
The concern is that inflation affects the value of the dollar: for every rise in inflation, the dollar will get worse; when inflation gets out of control and expands faster than the overall target of 2 percent set by the Federal Reserve, it could lead to economic problems and even to recession.
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