US inflation at the highest since 1990
New Delhi, Nov 11 (IANS) Pressure on America's central bank to raise interest rates has intensified after rising energy costs, supply shortages and increased consumption sent US inflation surging to a level not seen for more than 30 years, The Guardian reported.
Although the Federal Reserve has repeatedly insisted price pressures will prove "transitory", financial markets were taken aback by a 6.2 per cent increase in the cost of living in the world's biggest economy over the past year, the report said.
A Labor Department report released on Wednesday showed prices rose by 0.9 per cent in October alone - more than double the 0.4 per cent jump in September - to push the annual rate of inflation to its highest level since December 1990, a time when global oil prices had risen sharply due to the Iraqi invasion of Kuwait, the report added.
The news came after the Biden administration and the Federal Reserve tried to downplay rising costs, arguing they are a temporary phenomena driven by Covid-19's unprecedented impact on the global supply chain.
The increase was "broad-based, with increases in the indexes for energy, shelter, food, used cars and trucks, and new vehicles among the larger contributors", the Labor Department said. "The energy index rose 4.8 per cent over the month, as the gasoline index increased 6.1 per cent and the other major energy component indexes also rose. The food index increased 0.9 per cent as the index for food at home rose 1 per cent."
Last week. Fed chair Jerome Powell warned that inflation had been long lasting than anticipated. Powell said the Fed still expected recent price rises to be "transitory" but added that it was "very difficult to predict the persistence of supply constraints or their effects on inflation".