Inflation in the United States slowed in April after seven months of incessant risesa tentative sign that price increases may be reaching their peak and still put pressure finance to American households.
Consumer prices rose 8.3% last month from 12 months earlier, the Labor Department said on Wednesday. That was down from the 8.5% year-over-year increase in March, which was the highest rate since 1981.
Month on month, prices rose 0.3% from March to April, still high rate but smallest increase in eight months. Consumer prices soared 1.2% from February to March, mainly due to a sudden increase in lgasoline prices caused by the Russian invasion of Ukraine.
Nationally, the price of a gallon of regular gasoline reached a record US$4.40, although that figure is not adjusted for inflation.
The high price of oil is the main factor. A barrel of benchmark US crude sold at around $100 a barrel on Tuesday. Gasoline had fallen to around $4.10 a gallon in April, after hitting $4.32 in March.
a political problem
Beyond the financial pressure on households, inflation is raising a serious political problem for President Joe Biden and congressional Democrats in the midterm election season.
Republicans argue that Biden’s $1.9 trillion financial support package last March overheated the economy by flooding it with stimulus checksimproved unemployment aid payments and child tax credit.
On Tuesday, Biden sought to seize the initiative, declaring that Inflation is “the number one problem that families face today” and “my top priority national”.
Biden blamed chronic supply chain problems related to the rapid economic rebound from the pandemic, as well as the Russian invasion of Ukraine, for igniting inflation.
He said his administration will help alleviate price increases by reducing the government budget deficit and fostering competition in industries, like meatpacking, that are dominated by a few industry giants.
Still, new troubles abroad or other imponderables could always push US inflation lower. go back up to new highs.
If the European Union decides, for example, cut Russian Oil, US gas prices are likely to accelerate. China’s COVID lockdowns are getting worse supply problems and hurting growth in the world’s second-largest economy.
Earlier signs that US inflation might be peaking did not last. Price increases slowed last August and September, suggesting at the time that higher inflation might be temporary, as many economists and Federal Reserve officials had suggested.
But prices spiked again in October, prompting Fed Chairman Jerome Powell to begin change the policy towards higher rates.