In the U.S.A, the inflation is rising rapidly. On Wednesday, the Bureau of Labor Statistics reported that the Index of consumer prices rises up to 7% and continuously increasing. The rents and other housing prices are at their peak values. Moreover, food and rates of various essential items are also higher than usual.
No doubt, it is an alarming situation for the US economy. In addition to this, the current hike of inflation is also a big question mark for the Biden and policy makers. Now, economists also worried that something worse will happen, if the current situation of inflation remain as it is. Furthermore, the inflation is increasing even faster than the expectations of the economists.
Indeed, one significant cause behind this abrupt increase of inflation in the US is Covid-19 pandemic. There is no doubt that the era of coronavirus destroyed the economic structures of several countries. The countries are trying hard to manage their financial system.
The high inflation forces the consumer to make a hard selection on what they really need to buy. It’s true that it will hurt the country’s economy. The rising prices of the goods and expensive essential facilities will slow down the overall economy.
Some hopeful and optimistic experts are explaining the situation with positivity that still consumers are buying goods. If they stop buying, it will bring destruction for demand channels, still U.S.A is not at that point, Mike Skordeles, the US macro strategist with Truist Financial.
Aneta Markowska, a chief economist, said that inflation is close to its peak, but they expect that it will decline after January.
It is clear from all these data and statements of the economists that we can’t expect the disappearance of inflation in 2022. There is a chance that it will decrease in coming months, but will not completely disappear.