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U.S. inflation picked up again in June after holding steady in May, according to the Commerce Department’s personal consumption expenditure index released on Friday.
This indicator, which is included in the calculation of the inflation rate relied on by the Federal Reserve, reflects a price increase of 6.8% compared to June 2021 and 1.0% compared to May, due to higher energy and food prices.
If we exclude energy and food prices, which have risen sharply since the start of the Russian invasion of Ukraine, core inflation also increased by 0.6% in a month and 4.8% in a year.
Another indicator, the Consumer Price Index, published by the Labor Ministry and specifically used to calculate pensions, showed prices rose 9.1% year-on-year in June.
Household expenses
On the other hand, household expenditure also increased by 1.1 per cent in June on the impact of energy, housing and healthcare expenditure.
On the other hand, incomes continued to rise by 0.6 percent compared to May, mainly reflecting, according to the Commerce Ministry, a sharp increase in rent payments from “wage increases,” especially private companies, and “landlord income.” The beginning of the Covid-19 crisis.
On the other hand, the percentage of savings from disposable income continued to decline to 5.1%, after increasing significantly during the outbreak of the pandemic under the influence of a drop in spending on travel and restaurants and government aid distribution. , will reach an all-time high of 33.8% in April 2020.
Supply chain
These savings allowed consumption to be supported, but amid disruptions in supply chains, these spending accelerated inflation, causing overheating in the economy.
However, the US economy began to slow down, paving the way for inflation to stop.
US GDP contracted again at an annual rate of 0.9 percent in the second quarter of the year, after falling 1.6 percent in the first quarter.
According to the president’s administration, the debate began over whether the “traditional” definition of deflation, based on two consecutive quarters of decline in gross domestic product, currently applies to the United States, especially in light of the extremely low unemployment rate. Joe Biden and many other economists.
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