U.S. inflation heats up, consumer price index hits biggest increase in nearly 13 years
China News Service, June 11th. According to the “Central News Agency” report, US inflation continues to rise. In May, the consumer price index increased by 5% annually, the largest increase in the past 13 years, and was higher than market expectations. The report pointed out that the recent sharp rise in inflation is related to the easing of the epidemic and economic recovery, and it is also related to whether the loose monetary policy changes.
On the 10th local time, the U.S. Department of Labor announced that the Consumer Price Index (CPI) in May 2021 increased by 5% over the same period in 2020, which was higher than the 4.2% in April 2021 and market expectations. 4.7%, the highest increase since August 2008; if excluding food and energy that fluctuate, the so-called core CPI rose 3.8% compared to the same period in 2020, the largest increase since June 1992.
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It is reported that the annual growth rate of CPI in the past two months has soared. Part of the factor is that in the same period of 2020, the United States has been severely affected by the new crown epidemic, and many places have implemented blockade measures. . Now that the economic environment has changed drastically, the low base period effect may continue to affect inflation data in the short term.
After the large-scale vaccination in the United States, epidemic prevention restrictions have gradually been loosened. People who have increased their savings during the epidemic have actively eaten out and traveled. In response to rising prices of raw materials and rising wages, the catering industry has passed costs on to consumers; air tickets, car rentals, and hotel reservations have soared as the demand for travel has recovered.
In early 2021, when inflation showed signs of heating up, investors worried that the Fed might raise interest rates ahead of schedule or reduce the scale of bond purchases in order to maintain price stability, resulting in increased volatility in the stock and bond markets. US officials have successively promised that economic support will not be reduced in the short term, and their worries have temporarily subsided.
However, the price increase in April and May exceeded expectations, which may make more people doubt whether this wave of price increases is a short-lived phenomenon described by Fed officials and that officials are not doing anything about rising inflation. How long can the will to move last?
The Fed has set an inflation target of 2%. The decision-making reference index is not the CPI announced by the Department of Labor, but the core personal consumption expenditure (Core PCE) price index with a slightly lower value. The data showed an annual growth rate of 3.1% in April, but officials have indicated that the tolerance value will exceed 2% for a period of time and the monetary policy will be maintained until full employment is achieved.