Economic concerns, particularly rising consumer prices, have contributed to President Joe Biden’s falling approval rating in recent months.
Now, the Department of Commerce is confirming that inflation increased in August to the highest levels since 1991.
Increased prices across the board
The Personal Consumption Price Index registered a 4.3% increase over the same point last year with price spikes impacting goods and services alike.
Officials blame product shortages and supply interruptions for much of the rise while the COVID-19 pandemic is being blamed for other increases. Energy prices, for example, shot up by nearly 25% over August 2020 when prices were being kept artificially low as many Americans avoided travel.
Food prices were up 2.8% while the cost of other goods and serves rose by about 3.6%. Between July and August, the Consumer Price Index jumped by 0.4%, which was slightly higher than predicted.
The overall inflation rate for the year was pegged at 5.5%, up from 5.3% in July. Durable goods rose 7%, which is the sharpest increase in 40 years.
For his part, Federal Reserve Chairman Jerome Powell said he expects inflation to remain elevated until next year. He previously forecasted that it would be a temporary issue as the economy recovers from COVID-19.
“Longer than we had thought”
“It’s also frustrating to see the bottlenecks and supply chain problems not getting better — in fact at the margins apparently getting a little bit worse,” Powell explained. “We see that continuing into next year probably, and holding up inflation longer than we had thought.”
In an open letter this week, trade experts urged the United Nations and other global organizations to work toward preventing a possible collapse of the global supply chain amid labor shortages impacting busy ports including in Los Angeles and New York.
“We are witnessing unprecedented disruptions and global delays and shortages on essential goods including electronics, food, fuel and medical supplies,” the letter asserted. “Consumer demand is rising and the delays look set to worsen ahead of Christmas and continue into 2022.”
Dozens of container ships have reportedly been waiting to be unloaded in Los Angeles and the supply chain experts expressed fears that things are likely to get worse before they get better.
“It is of great concern that we are also seeing shortages of workers and expect more to leave our industries as a result of the poor treatment they have faced during the pandemic, putting the supply chain under greater threat,” the letter concluded, advocating for “meaningful and swift action” to address the issue.