The government’s consumer price index soared 9.1% over the past year, the biggest yearly increase since 1981, with nearly half of the increase due to higher energy costs.
with nearly half of the increase due to higher energy costs.
Accelerating inflation is a vexing problem for the Federal Reserve, too. The Fed is already engaged in the fastest series of interest rate hikes in three decades, which it hopes will cool inflation by tamping down borrowing and spending by consumers and businesses., and many analysts believe the trend continued in the second quarter.
Rental prices are adding to the pain average people are already feeling from price jumps on everyday items. In recent months, as COVID fears have receded, consumer spending has gradually shifted away from goods and toward services. Yet rather than pulling down inflation by reducing goods prices, the cost of furniture, cars, and other items has kept rising, while restaurant costs, rents and other services are also getting more expensive.
Shipping costs and commodity prices have also begun to fall, and pay increases have slowed. Surveys show that Americans’ expectations for inflation over the long run have eased — a trend that often points to more moderate price increases over time. “There may be some relief in the July numbers — commodity prices have come off the boil, at least — but we are a very, very long way from inflation normalizing, and there is no tangible sign of downward momentum,” said Eric Winograd, an economist at asset manager AllianceBernstein.Delores Bledsoe, a truck driver hauling freight from Carlisle, Pennsylvania to Wisconsin on Wednesday, said her fuel costs have tripled.
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