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The U.S economy is going through a rough patch, especially after the economy was shut down over a respiratory virus and as its response, the printing of trillions of dollars. As per the latest reports, the cost of everything in the supermarkets has increased, with the prices of stuff such as rent, gasoline, cars, and housing are soaring high. In addition, the prices continue to increase even though politicians claim that inflation would be “transitory.”
Some even claimed that the inflation reached its peak when April’s CPI data was released. However, May’s CPI revealed it wasn’t true. As per the metrics of the Labor Department, the CPI of the last month hit a 40-year high, reaching 8.6%.
The inflation has increased so much that the rising cost of goods and services has wiped out expanded child-tax credits, extended unemployment benefits, hikes in wages, and stimulus checks.
The higher CPI data is due to the rising prices of energy, gas, and food, according to the Labor Department’s metrics. In addition, the shelter costs turned out to be the largest contributor to the inflation data hike last month.
Though some US workers did receive a slight rise in wages, real wages experienced a dip of 0.6% from April. Economists have also pointed out the cost of goods and services continues to grow. John Leer, the chief economist at Morning Consult, finds the CPI of May disappointing.
On June 10, Leer said in a statement it’s hard to look at May’s inflation data and not feel disappointed. “We’re just not yet seeing any signs that we’re in the clear,” Leer added.
On the other hand, Joe Biden, the U.S. president, has put the blame on Russia and Vladimir Putin and continues to do so. This week, Biden highlighted at a press conference that Today’s inflation report confirms the fact that “Putin’s price hike is hitting America hard.”
While many have pointed out that the lockdown, shutting down the U.S. economy, and the Covid-19 stimulus bills are the real culprits. On Friday, Jeffrey Tucker, an economist, highlighted in a tweet, “I’m beginning to think it might not have been a good idea to shut down the economy for a respiratory virus.”
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With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
