The increase in prices accelerated in November, to post a rate of 6.8%, the largest increase ever recorded for thirty-nine years.
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Never seen since June 1982, under the presidency of Ronald Reagan, when Paul Volcker tried, at the head of the Fed, to land inflation after the two oil shocks of 1973 and 1979: rising prices In the United States increased over one year of 6.8% in November, on a sharp rise in the previous month (6.2%). Above all, inflation is now widespread on the North American continent, since the index excluding energy and food increased by 4.9% (compared to 4.4% a month earlier). The energy prices, they jumped one year of one-third and the feed of 6.1%, according to the figures published on Friday 10 December by the Ministry of Labor.
So seven months, since May, that American inflation exceeds 5%. Joe Biden and the president of the Fed, Jerome Powell, were mistaken with economic diagnosis, the first by adopting a major economic recovery plan and on the wrong time in March, while the economy was already bouncing the second by ensuring that the Price rise would be “transitional”, which he recently challenged. Result, real wages have been falling in two months (0.6 in October, 0.4 in November). Indeed, their nominal rise in annual rhythm (4.8%) is nearly two points upwards.
Bring the locks
Inflation is a complex mixture: it is partly due to an offer shock, caused by the bottlenecks due to COVID-19 and “demonialization”: semiconductor shortage, which paralyzes the automobile; Flying building materials for Americans who want to live in single-family homes; blocking ports in the United States and China; Labor Shortage, because of the “great resignation” of Americans, who left the labor market and live on the savings reserves accumulated during COVID. This inflation is also explained by a demand shock, with Americans who have massively reallocated their expenses, by buying goods rather than services.
This finding is now consensus, and the challenge is to resolve the causes of inflation. First initiative, blow up the locks: Logistics side, US ports increased the rates; President Biden unlocked the strategic reserves of oil and accused the producers of cartelization hydrocarbons; The planet puts double bites to build new semiconductor factories; The federal unemployed aid has been interrupted since September and must encourage Americans to regain the path of employment more quickly, especially since the government does everything so that schools, widely closed the first two years of the pandemic, keep Open doors. All these data participate in the pink scenario, that of inflation that should return to bed in the second half of 2022. They are corroborated by the first information on the Omicron variant, whose low lethality does not suggest a new blocking – inflationary – nervical points of the economy.
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