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Prices across the United States rose by five percent last month compared to October 2020 as the wave of inflation accelerated, the government reported Wednesday. Bulletin News
The year-on-year increase in the Commerce Department’s personal consumption expenditures price index was its largest since November 1990 and above the 4.4 percent change reported in September.
Incomes last month rose by a more-than-expected 0.5 percent, while spending similarly exceeded analysts’ forecasts with a 1.3 percent gain.
The report indicates that Americans are continuing to shop and see their incomes grow even as inflation rises at record rates, with the data showing energy prices up 30.2 percent from October 2020 while food prices were 4.8 percent higher.
The inflation acceleration occurred at the monthly level too, with the price index rising 0.6 percent compared to September, in line with analysts’ forecasts.
Americans saw their incomes rise due to increasing wages and gains from assets, the data showed, indicating as well that the increase was undercut by the tapering of government benefit payments, likely due to the expiry of pandemic aid programs.
Consumers directed their spending towards both goods and services.
Much of the $123.8 billion increase in goods spending went to motor vehicles and parts, while international travel was a components of the $90.5 billion increase in services spending that was felt across sectors, the government said.
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Notes from APs Radio News
During the past year, a number of the world’s central banks have engaged in massive programs of monetary expansion, even as jobs and businesses were lost by way of virus-related restrictions and quarantines.
For example, beginning in March of last year, the US Federal Reserve engaged in a substantially greater program of monetary expansion by purchasing hundreds of billions of dollars of Treasury and corporate bonds.
Since the early part of March 2020 to date, the Federal Reserve has added over $4 trillion to its holdings.
As well, the Federal Reserve has kept interest rates low.
Recently, Jerome Powell, the head of the Federal Reserve, said that he wasn’t concerned about inflation and that, for the none, the Federal Reserve would keep interest rates at low levels.
Another examples is that of the Bank of Japan.
According to Fred Economic Data, as of October 2021, the Bank of Japan’s holdings were about $6.4 trillion or about 725 trillion Yen.
In the early part of March 2020, the Bank of Japan’s holdings were $5.3 holdings. During the period mentioned, the Bank of Japan added over one trillion dollars to its holdings.
A number of corporations have been borrowing money inexpensively and have been purchasing their own shares of stocks, increasing share prices of stocks.
Still, there are concerns among investors.
A number of them have expressed concerns about central banks’ eventually increasing interest rates, as, during the past year, inflation levels have been increasing.
The combination of low interest rates, expansive monetary policies, fiscal stimulus programs, which themselves have infused trillions into the US economy, and shortages of goods and services caused by virus-related restrictions and lockdowns has increased levels of inflation.
Investors also worry, for example, about announcements recently made by Toyota and VW; those companies have announced that because of shortages of particular types of material, they will be reducing levels of production.
Some weeks ago, the results of a survey of UK manufacturers were released.
That survey indicated that many businesses in the UK are concerned about shortages of supplies and will be making necessary adjustments.
In general, jobs and businesses have been lost by way of mandates, restrictions and quarantines, which, in their turn, were imposed by way of the virus narrative.
In the US, overall, the mortality rate of the virus is about .069%, according to Statista, an award-winning service.
The recovery rate is over 99% for most age groups.
What has followed in the wake of lockdowns and mandates has been the infusion of trillions of dollars into the US economy, the increasing succeess of online businesses like
Amazon and other large online retailers, various bank and tech-related stocks, the shuttering of small to medium-sized businesses and the loss of millions of jobs.
Another result has been the increasing levels of inflation, especially those of food and fuel.
In official terms, for purposes of reporting, the US Labor Department uses what is called “core inflation”.
Core inflation excludes items like food and fuel, as those are deemed too volatile.
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