Surge in U.S. consumer prices post-inauguration: causes and impacts

by / ⠀News / May 20, 2024
Consumer Price Surge

Following President Joe Biden’s inauguration, the U.S. has seen a surge in consumer prices by roughly 20%. The causes have been linked to factors such as the cost of raw materials, production, and labor. Furthermore, Covid-19’s impact on the supply chain and the resultant volatility has intensified the inflation issue.

The Federal Reserve has begun implementing strategies to counteract this effect, but their success remains to be seen. Due to this, individuals and corporate debtors are required to reconsider and alter their budgeting strategies to adapt. Nonetheless, some economists believe that this inflation period may be transient, and prices might decline in the near future.

Renowned Bankrate specialist, Sarah Foster, presents an optimistic view suggesting that the ‘Goldilocks’ threshold of 2% inflation could be achieved by late this year or sometime in 2025. However, the hardships faced by the average American household in managing personal finances will persist until that point is reached.

An interesting trend has been observed in retail transaction sectors. Retail transactions, excluding gas and auto sales, saw a slight dip of 0.1% from March to April.

Analyzing post-inauguration consumer price surge

Around the same time, a decrease of 1.2% was noticed in e-commerce, arguably due to market unpredictability. Notably, progress is being observed in different sectors, with in-store shopping returning for products such as food and clothing.

However, transaction patterns are inconsistent across sectors. While electronics and clothing/accessories experienced increased sales, home furnishings, and sporting goods stores have declined. These patterns reveal the volatility of the retail sector in the current market scenario.

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Contrary to inflation hikes, American salaries have been struggling to keep up. More than half of Americans feel their earnings haven’t kept up with the rising costs despite receiving pay raises. However, the strengthening employment market might offset these issues to a slight degree.

Finally, the Federal Reserve’s strategy to control inflation through spending regulation appears to be largely effective. Despite a minor dip in construction jobs due to unpredictable weather patterns, sectors like manufacturing show promise. The job market is anticipated to┬ástabilize further, and domestic productivity will increase as the fiscal year progresses.

About The Author

Kimberly Zhang

Editor in Chief of Under30CEO. I have a passion for helping educate the next generation of leaders.

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