US Inflation Rate Increases Again in June
According to government data, the US government is recording the highest increase in inflation rate since the 2008 financial crisis, which may indicate that supporting US President Joe Biden's economic recovery plan may be undermined.
Last month, the US economy recorded the highest increase in the inflation rate since 2008, which increases the burden on consumers, contradicting the White House and the Federal Reserve's expectations to observe a decrease in prices.
In light of large-scale vaccination campaigns against the Coronavirus, the world's most powerful economy eased restrictions imposed to contain the pandemic. Hence, Americans have resumed spending and travel amid a rise in the prices of used cars, gasoline, hotel costs, and tickets.
This all undermines the initial support for US President Joe Biden's economic recovery plan, including job opportunities and infrastructure projects.
According to the Ministry of Labor, the consumer price index recorded a 5.4% increase over the last 12 months until the end of June.
After dropping during the closing periods, oil prices rose again, driven by the failure of OPEC+ to reach an agreement on increasing production.
The gasoline price increased by 45.1% over the past year - without a seasonal adjustment - and 2.5% in June.
These numbers, supposedly, are going to heavily weigh on US Federal Reserve Chairman Jerome Powell during his congressional hearings held on Wednesday and Thursday.
Powell repeatedly insisted that most factors that lead to higher prices will disappear, simultaneously decreasing the inflation rate.
The White House Council of Economic Advisers indicated that interim factors lead to an increase in inflation, warning against fluctuations in the process of recovering from the pandemic.