U.S. consumer prices rise 6.8%, the highest in 39 years

According to foreign media reports, U.S. consumer prices rose 6.8% in the 12 months ending November, a 39-year high.

Many economists expect inflation to remain around that level for several more months but to moderate somewhat by 2022 for a variety of reasons. But they don’t expect a repeat of the 1970s or early 1980s, when inflation exceeded 10% for long stretches of time .

Experts predict that households in some regions may even see relief in a few weeks. Crude oil and gas prices have fallen on the global market, and this phenomenon is slowly filtering down to household necessities . This should curb inflation to some extent.

To be sure, economists say that even if inflation is effectively mitigated after 2022 , it is likely to remain at higher levels than before the pandemic .

Inflation has regularly been below 2% over the past decade , and it was below zero for part of 2015. The greater danger then is too little inflation, which could also lead to a weak economy.

However, ADP Chief Economist Nela Richardson said , "Inflation will eventually moderate, but that doesn't mean prices will fall . We are just reducing the rate of change, not the level of prices. "

It is reported that the US government may also reduce assistance to families in 2022, whether through child tax credit payments or enhanced unemployment benefits . This measure may also cause Americans to buy less, further easing inflationary pressure.

And with inflation weighing on workers across the country, they are fighting for higher wages. For example, employees at Deere & Co. recently won an agreement that will give them an immediate 10% pay raise.

Typically, companies would try to pass on such increases to their customers by raising prices.With unemployment falling and businesses scrambling for workers — there were nearly 1.5 job openings for every unemployed person at the end of October — pressure for faster wage growth may be building.

Most importantly, is whether the surge in inflation we've already seen spooks American households into accelerating their purchases to get ahead of any further price increases. That could create its own feedback loop, pushing prices higher.

"It's a concern because when you're fighting inflation on multiple fronts -- it's not just the supply chain, it's not just the labor market shortages, now you have consumers involved -- it makes it dramatically more difficult to control inflation, " the expert said.

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inflation

Rising prices