l'inflation s'accélère de nouveau en mai, au plus haut depuis plus de 40 ans

l’inflation s’accélère de nouveau en mai, au plus haut depuis plus de 40 ans

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Consumer prices jumped 8.6% year on year, from 8.3% last month. The rise reached 1.0% over one month after +0.3% in April.

Consumer prices resumed their escalation in May in the United States, breaking a new high in 40 years. Consumer prices jumped 8.6% year on year, against 8.3% last month, according to the consumer price index (CPI) published Friday, June 10 by the Department of Labor. The rise reached 1.0% over one month after +0.3% in April. ‘We need to do more – and quickly’ to slow inflation, Joe Biden said in a statement, recalling that it was his “economic priority”.

These figures are bad for Joe Biden a few months before a crucial electoral deadline, which will see the renewal of a large part of the elected representatives of Congress. “My administration will continue to do everything in its power to bring down prices for the American people”, he promised, also calling on Congress – the US Parliament – ​​to quickly pass legislation to prevent shipping carriers from inflating prices. Government, Congress, central bank: “We all have our part to do to reduce inflation”he pointed out.

The American president also attacked the American oil giants, so that they “do not use the difficulties created by the war in Ukraine as a reason to make matters worse for families with excessive profit taking or price hikes”. “Exxon Made More Money Than God This Quarter”then joked the American president after a speech at the port of Los Angeles (California), again criticizing the tanker for not pumping more oil, which could lower prices, for the simple purpose of boost its profits.

Of fuel

The Republican opposition accuses the Democratic president’s economic policy of being inflationary: “In Joe Biden’s America, basic necessities have the price of luxury items”, according to the chairman of the Republican National Committee (RNC), Ronna McDaniel. Housing, gasoline, plane tickets, food, new and used cars, but also medical care, clothing… The increase was general, dampening hopes of a lasting slowdown in inflation, which began timidly in april.

“The higher inflation numbers reflect a continued confluence of factors”, underlines Kathy Bostjancic, chief economist for Oxford Economics. Supply difficulties, which began with the Covid-19 pandemic, have driven prices up around the world, a move accentuated in the United States by a labor shortage, while generous government financial aid stimulated demand. The war in Ukraine has exacerbated the phenomenon, driving up gasoline and food prices. Inflation compared to May 2021 is thus 34.6% for energy – the largest increase since September 2005 – and 10.1% for food – the largest increase since March 1981.

While Americans are very dependent on their car, and often favor fuel-guzzling models, gasoline prices are breaking new records every day, reaching an average of 4.986 dollars per gallon (or 4.55 liters) on Friday, against $3,073 a year ago (+62%). It even boosted requests for assistance with fuel out of fuel in April by a third, according to data from the AAA motorist association, cited by the washington post. Excluding energy and food, so-called core inflation, however, was stable over one month, at +0.6%, and even slowed down over one year, to +6.0%.

This situation should convince the US Central Bank (Fed) to tighten its key rates further next week at its monetary committee meeting. The institution is on the move, its main lever being to curb demand from consumers and businesses, via key rate hikes. It has already raised them twice, by a quarter point and then by half a percentage point, to the range of 0.75 to 1.00%.

The fight against inflation could weigh on the US economy, even raising fears of a recession. Unemployment could rise again. “Should we fear stagflation?”that is, a prolonged period of low growth and high inflation, asks Gregory Daco, chief economist of EY-Parthenon: “No, not in 2022, but the risks will be much greater in 2023”.

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