June 10, 2021 1:20 PM | 15 minutes
15 minutes. Concern about inflation grows again in the US after the data of the consumer price index (CPI) was released, which rose 0.6% in May and has placed year-on-year inflation at 5%, the highest figure since August 2008.
If food and fuel prices, which are the most volatile, are excluded, core inflation last month was 0.7%, and 3.8% in the last 12 months, the Bureau of Labor Statistics (BLS) reported. .
The underlying year-on-year data is the highest since 1992, the monthly report noted.
The increase in prices in May was largely due to the increase in used car prices (7.3%) and airline tickets (7%), while energy prices, after several months rebound, they remained stable.
However, the sustained rise in prices, whose interannual rate went from 4.2% in April to 5% in May, has once again sounded the alarms in the US in the face of the specter of inflation.
Although most economists agree that as a consequence of the lifting of the restrictions imposed by the pandemic and the economic reopening, it is normal to observe increases in prices, the question is whether it is a temporary rebound or is due to underlying reasons, what would be more dangerous.
Last week the fast food chain, Chipotle, one of the most popular in the country, raised its menu prices by 4% in much of the United States to cover the costs associated with higher wages and higher raw material costs, he said. Jack Hartung, CFO, on a call with investors.
In the opinion of Andrew Hunter, an economist at the consulting firm Capital Economics, “most of the boom is due to a small group of categories directly affected by the suspension of restrictions on the virus.”
Although he acknowledged, in a note to clients, that “there are also signs of emerging inflationary pressures in other sectors, such as housing and restaurant costs” suggesting that “not all the upward pressure on inflation will be transitory.”
For her part, Diane Swonk, the chief economist of the financial advisory firm Grant Thornton, stressed that the US is moving “without a doubt towards what is going to be a long and hot summer as consumers continue to spend more. faster than most producers and service companies can handle. “
For the US government, the reasons for this boom lie in the economic reactivation as the virus is contained, and it sees no cause for concern.
“Today’s inflation data is the latest indicator that things are moving in the right direction, with some problems in the supply chain,” said Heather Boushey of the White House council of economic advisers in a message on Twitter. , noting that half of the price hike in May was due to increases in used cars and airline tickets.
Pressure for the Fed
The rebound in prices in May is known a week before the US Federal Reserve (Fed) meeting next week on monetary policy.
The Fed has rejected inflationary pressures in the country due to the extraordinary fiscal stimulus deployed and the increase in demand as restrictions are lifted due to the improvement of the pandemic in the country.
Its president, Jerome Powell, has acknowledged that there will be notable price increases, but that they will be “transitory” in nature, so he has insisted that he does not plan to modify the central bank’s interest rates, currently between 0% and 0.25% for the remainder of the year.