Prices in the US continue to stay at a high level as the economy grows rapidly.
The key US inflation index rose by 4% in June compared to the same period last year. This is evidenced by statistics published by the Ministry of Commerce on Friday. As economic growth resumes, prices in the United States are kept at a high level.
However, the 12-month index of private consumer spending did not increase as expected by economists but remained the same as in May, the Ministry of Commerce said in a statement. The index rose slightly to the level of 3.5%, provided that prices for food and energy sources are excluded from it.
Prices in the US economy, which is the largest globally, are rising, returning to normal after the recession caused by last year’s COVID-19 pandemic. However, economists are still arguing about whether inflation will turn out to be a long-term phenomenon or will soon come to naught.
According to published data, consumer spending increased by 1% in June compared to May – this indicator also exceeded economists ‘ expectations.
Americans ‘ incomes rose by 0.1% over the month, contrary to forecasts of their decline as the effect of government stimulus implemented earlier this year weakened.
“Spending and (economic) growth are likely to be supported by high levels of income and savings in the near term, but we expect a slowdown in growth,” said Rubeela Farooqi of High Frequency Economics.
Americans set aside a record amount of money during the pandemic, and the report shows that the reserves of these savings are now shrinking. At the same time, the personal savings rate fell by a little less than one percentage point to 9.4%, with about $ 1.7 trillion stored in banks in personal accounts.
Compared to the previous month, the index of private consumer spending increased less than expected – by 0.5%.
The main inflation indicator used by the Federal Reserve System (FRS) has exceeded the Central Bank’s long-term target set at 2%, which increases pressure on regulators who have promised to pursue an “easy money” policy to help the economy grow.
Farooqi, like the Fed representatives, believes that inflation was caused by temporary factors and predicts that “price pressure should ease in the coming months, as supply chain disruptions will weaken, and the effect of reopening (the economy) will disappear.”