Inflation in the US registers an increase of almost 5% in 12 months; maximum 31 years

The consumer prices They continued to rise in October in the United States, driven by energy, and registered a 12-month increase of almost 5%, their biggest annual increase since 1990, according to official data released Wednesday.

According to Commerce Department PCE Index, month-to-month inflation was 0.6% between the months of September and October. In addition, household income and expenses increased much more than expected in relation to September, 0.5% and 1.3% respectively.

The annual increase in the PCE index, which measures the increase in prices based on personal consumption, is the oldest since November 1990 and it was well above 4.4% as of 12 months last September.

The report indicates that Americans continue to buy hand in hand with higher incomes although inflation reaches record figures. The data shows that energy prices have risen 30.2% since October 2020 while food has risen 4.8%.

Americans’ income also went up for higher wages and income derived, according to official data.

Consumers directed their expenses to both goods and services.

For its part, consumer spending rose more than expected in October, as households bought vehicles and other goods, still showing no signs of containment due to high inflation and boosting the economic outlook at the beginning of the fourth quarter.

The Department of Commerce reported Wednesday that consumer spending, which accounts for more than two-thirds of US economic activity, rose 1.3% last month, after rising 0.6% in September.

Spending was partially driven by higher prices as demand continues to outpace supply.

Consumer spending is accelerating after slowing sharply in the third quarter due to the upsurge in infections caused by the Delta variant and widespread product shortages.

Fears that shelves are empty and having to pay even more for scarce items has encouraged Americans to start their Christmas shopping early. Retailers expect Christmas sales to be the best in years, but some economists are warning of the risks. The Covid-19 infections are on the rise again, which could lead some consumers to cut spending on travel and entertainment, including dining out.

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