Inflation in the United States continues to scare and disturb American consumers. In June, the 9.1% year-over-year increase in the main indicator that measures inflation in the country, the Consumer Price Index (CPI), was the highest in the last four decades. During the month, prices rose 1.3% from May to June, another substantial increase, following a 1% rise from April to May.
According to a statement released by the Bureau of Labor Statistics, the main culprits behind the price increase are essential goods and services: fuel, housing, and food.
Energy costs rose 41.6% in the last 12 months. The retail price of gasoline alone jumped 59.9%.
In the food sector, the price of food increased by 12.2% compared to a year ago, primarily reflecting the sharp rise in the cost of meats, poultry, fish, and eggs, which together rose 11.7% during the same period.
In the housing sector, rents saw the largest increase since 1986, and are 5.8% more expensive than a year ago, surpassing pre-pandemic levels. In the buying and selling market, home prices nationwide have skyrocketed by over 24% since April 2020.
But even excluding the volatile prices of food and energy, the core inflation rate rose 5.9% in the last 12 months. Several other sectors of the economy have been contributing to this. The cost of acquiring a new car, for example, is 11.4% higher than a year ago. Traveling is also hurting consumers’ wallets; airfares have risen by 34%.
Prices are increasing due to various factors, including billions of dollars in government stimulus during the pandemic, high consumer demand, COVID-19-related supply chain bottlenecks, and more recently, the impact of the war in Ukraine on energy supply.
Some analysts are hopeful that inflation may be reaching its peak. The price of gasoline at the pumps, for example, has decreased in recent weeks, and this reduction has not yet appeared in inflation indicators. However, many of them also believe that bringing inflation back to the target of the American Central Bank (FED), 2% annually, will take 18 to 24 months.
And during this time, what can we, consumers unaccustomed to high inflation in the United States, do to minimize the impact of the constant price increases?