U.S. media: rising prices may be ingrained, high inflation may become the norm in the U.S. economy – yqqlm

Overseas Network, October 14. According to the “New York Times” report on the 13th, the inflation rate of the United States did not decrease in September, and the increase in core prices even reached the highest level in 40 years. With the rising price trend likely to have become entrenched, officials worry that high inflation may become the norm in the U.S. economy and will be difficult to eradicate.

According to data from the U.S. Department of Labor, the consumer price index (CPI) increased by 8.2% year-on-year in September, higher than market expectations of 8.1%; especially after excluding volatile food and energy, the core CPI increased by 6.6% year-on-year, higher than 8.1%. 6.3% of the month, the highest level since August 1982. In order to curb inflation, the Federal Reserve raised interest rates five times this year, and raised interest rates three times in a row by 0.75 percentage points. It is expected to continue to raise interest rates in November and December. But there are still huge inflationary pressures in the United States. The Fed has already slowed the housing market by raising interest rates, and the impact of higher interest rates will spill over to the rest of the economy as it makes borrowing more expensive for things like bulk purchases and business expansion. Supply chain disruptions have led to shortages of some commodities in the United States, and labor shortages in the United States have also led to rising labor costs. Many companies have to pass on costs to consumers to expand profits.

Economists are still forecasting a slowdown in inflation and the economy in the coming months, but overall U.S. inflation for the year is now above 5 percent, well above the Fed’s original annual target of 2 percent. As soaring prices continue, Fed officials worry that consumers and businesses will gradually become accustomed to inflation. If this were to happen, employees would start asking for more raises in response to the rising cost of living, and employers could periodically hike prices of goods and services substantially, creating a vicious circle that would make inflation a norm in the U.S. economy and harder eliminate. Although this phenomenon has not yet been reflected in the relevant survey reports, economists said that the inflation data itself has now carried signs that “price increases may become entrenched”. (Hou Xingchuan from Overseas Network)