Business

Inflation in the United States continues to rise rapidly




Central bankers hope that their policies will curb economic growth without pushing up unemployment or throwing America into a recession – constructing what they often call a “soft landing”.

“I really want us to make it the result, but I realize it’s not going to be easy to do,” Raphael Bostic, president of the Federal Reserve Bank of Atlanta, said in an interview Monday.

Officials have fully acknowledged that it will be difficult to let go of the economy cautiously, and some have suggested that they would be willing to inflict financial pain if it were to cope with high inflation.

If the economy reaches a point where unemployment begins to rise, but inflation remains “unacceptably high”, Bostic said, price increases will be “the threat we must face”.

A challenge for decision-makers – and even more so for families – is that price increases appear in the main. Food costs rose 0.9 percent in April from the previous month, the 17th monthly increase in a row, Wednesday’s report showed.

The increase was driven by dairy products, non-alcoholic beverages and a 10.3 per cent monthly increase in the cost of eggs, as bird flu decimated flocks of poultry. Such inflation tends to affect the poor in particular, who spend a larger part of their budgets on needs such as groceries and gas.

But as Americans see strong job gains and strong wage growth – though not strong enough to fully counter inflation – many are able to bear the rising costs for now, keeping overall demand strong.

“Consumers seem to accept the higher menu prices, especially since inflation is broad,” said George Holm, CEO of food distributor and restaurant supplier Performance Food Group, in an earnings interview on Wednesday. “Still, this is something to monitor closely over the coming months and quarters.”

Ana Swanson contributed with reporting.



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