US inflation rises faster than expected in April to 4.2%
US consumer prices rose by 4.2% in April to a higher level than a year ago, a bigger jump than economists had expected, which could raise concerns that inflationary pressures are settling.
The US inflation the reading draws particular attention among some investors, economists and analysts because of the fear of high fiscal support, supply bottles and high demand caused by rapid vaccination against coronavirus will lead to a dangerous rise in prices in the coming months.
Excluding volatile food and energy costs, the CPI rose from 1.6 percent annually to 3 percent in April. Each month, the CPI rose by 0.8% and the basic reading rose by 0.9%.
This is the biggest increase of 4.2 per cent in the headline since 2008, a significant jump compared to the 2.6% year-on-year increase in March.
However, Federal Reserve officials and senior economists in the Biden administration, including Finance Secretary Janet Yellen, have said they expect the rise to be temporary.
Because the high CPI figures are “basic effects” compared to last year’s decline in inflation at the start of the coronavirus crisis, U.S. economic politicians also believe the inflationary pressures that have dominated the global economy in recent decades. they have not calmed down.
Faith officials are more tolerant of inflation, mainly because consumer prices have often been below the central bank’s 2 percent target, and they have also struggled with loose monetary policies to achieve the rise.
“As long as the accumulation of the supply chain and other frictions that reopen are temporary, they are unlikely to generate higher inflation on their own.” Lael Brainard, The governor of the faith, said Tuesday.
“Sustained material growth in inflation requires a temporary rise in wages or prices after reopening, as well as a broad expectation to continue to grow at a steadily higher pace,” he said.
Despite limited Fed and Treasury concerns, the alarm about higher inflation has been fairly widespread in U.S. business since the last reading of the CPI, and investors have cited it as a compelling reason stock market sale this week.
Warren Buffett, CEO of Berkshire Hathaway, said earlier this month that his company’s executives were seeing “very high” inflation. “People raise prices for us and it’s accepted.”
Tyson Foods said prices have risen significantly this week. “Overall, we are seeing rapid inflation in the environment in the last half of the year, which is creating significant high winds for prepared foods,” said Donnie King, head of operations. “We are raising raw material costs by more than 15 per cent, as well as increases in logistics, packaging and manpower.”
Additional report by Matthew Roco