U.S. consumer prices are expected to record their largest annual increase since 1982
It is expected that consumer prices in the United States will rise at the fastest rate in nearly 40 years in November, which may put greater political pressure on the Biden administration as it is seeking support for large-scale spending plans.
According to the consensus forecast compiled by Bloomberg, the Consumer Price Index (CPI) released by the US Bureau of Labor Statistics at 8:30 am Eastern Time on Friday is expected to rise by 6.8% over the same period last month, which will be the fastest since 1982 Annual growth rate and significant Pick up It was 6.2% in October.
It is expected that prices will rise by 0.7% between October and November, which is a more modest month-on-month increase than the previous month.
Excluding volatile items such as food and energy, the “core” CPI is expected to rise 0.5% from October. This is roughly the same as the previous period, but will push the annual growth rate to 4.9%. Last month, it registered 4.6%.
Inflation has become a thorny political issue for the White House, affecting President Joe Biden’s approval rating and his Democratic prospects in the midterm elections next year.
The Biden administration took a defensive stance ahead of Friday’s report, and the president issued a rare statement attempting to downplay the relevance of incoming data.
Biden said on Thursday: “The November energy information released tomorrow does not reflect today’s reality, nor does it reflect expected price drops in the coming weeks and months, such as in the auto market.”
Gasoline and natural gas prices have slowed in recent weeks, but a senior government official said that the November report did not reflect this “relief”. The source added that price pressures will be further weakened in 2022, noting that such forecasts are consistent with most official and private sector forecasts.
Brian Diss, director of the National Economic Council, reiterated this on Thursday, while also emphasizing the White House’s commitment to tackling inflation.
The risk for the White House is to legislate to invest $175 million in the US social safety net, and Biden is seeking to pass Congress this month.Biden last month Signed into law Another flagship bipartisan infrastructure bill worth 1.2 trillion US dollars.
Republicans and some moderate Democrats believe that additional spending will further push up prices, leading to higher inflation.
According to a Recent polls Academic economists at the Financial Times — in collaboration with the University of Chicago Booth School of Business Global Market Initiative — don’t expect planned spending to significantly change the inflation outlook.
Most of the 48 economists surveyed stated that the two bills had “no substantial effect” on inflation, while about one-third said that over time, this may cause slight price pressure rise.
Once focused on the sectors most sensitive to pandemic-related reopening and supply chain disruptions (such as used cars and travel-related expenses), inflation has expanded and there are now signs that it is becoming a persistent problem.
Federal Reserve Chairman Jay Powell is now Abandoned The central bank characterizes inflation as “temporary.” Senior officials have repeatedly invoked this feature to counter criticism that they have not taken a strong enough stance on what they consider to be temporary price pressures.
He acknowledged that the risk of inflation becoming entrenched has risen, which laid the foundation for the Fed to cut its stimulus measures faster at next week’s meeting. Just a month ago, the Federal Reserve announced that it would reduce its asset purchase plan by $15 billion per month, which means it will no longer purchase government bonds before the end of June.
Wall Street economists generally predict that the Fed will stop expanding its balance sheet in March, and expects to raise interest rates for the first time in June, and will raise interest rates nearly two times later this year.