Life in the United States is getting longer and longer. Inflation rose to 2.6 percent in March, the highest level since 2012.
It was widely expected that inflationary pressures would increase in the United States. A year ago, at the onset of the corona epidemic, large parts of the country were locked up and many businesses were closed. Demand for many products weakened, especially as oil prices plummeted. As a result of that ‘basic effect’, inflation figures for the March-May period will be unusually high.
Nevertheless, March inflation is still slightly higher than expected. Economists thought it was 2.5 percent, but it turned out to be 2.6 percent. This represents a significant acceleration compared to February, when the consumer price index rose 1.7 percent.
The index was up 0.6 percent month-on-month, already up 0.4 percent in February. This is slightly higher than expected (+ 0.5%). Higher fuel costs are half of what it was in March.
Excluding volatile food and energy prices, core inflation rose 0.3 percent for the month. This is the strongest increase in seven months, driven by somewhat higher rent and higher car insurance. For the year, core inflation rose to 1.3 to 1.6 percent.
There is no doubt that accelerating US inflation will spark debate over the impact of massive government support on the economy. In addition to President Biden’s $ 1,900 billion incentive program, a massive infrastructure project is under construction.
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