Multymeter.com-Business & Finance: Inflation in the United States reached 9.1% in June 2023, the highest in 40 years. This rise in inflation was caused by several factors, including the war in Ukraine and supply chain disruptions.
The following are several factors causing inflation in the United States:
- War in Ukraine
The war in Ukraine has caused energy and other commodity prices to rise. This is because Russia is a major producer of oil, gas and wheat.
- Supply chain disruption
Supply chain disruptions caused by the COVID-19 pandemic have not yet been fully resolved. This causes an increase in the prices of goods such as food and clothing.
- Increased demand
Increased demand for goods and services also contributes to inflation. This is because the US economy has recovered from the COVID-19 pandemic.
This rise in inflation has raised concerns about the falling purchasing power of the American people. This may lead to a decline in consumption and economic growth.
To overcome inflation, the Federal Reserve raised its benchmark interest rate by 75 basis points in July 2023. This interest rate hike is expected to slow down the inflation rate.
The following are some of the impacts of inflation in the United States:
- Decrease in purchasing power.
Rising prices of goods and services decrease the purchasing power of the people of the United States. This can lead to a decline in consumption and economic growth.
- Rising cost of living
Rising inflation also increases the cost of living. This can cause stress to the US population, especially those with low incomes.
- Economic uncertainty
Rising inflation creates economic uncertainty. This can disrupt investment and economic growth.
The US government and the Federal Reserve continue to work to address inflation. However, it is not yet clear how long it will take to bring inflation down to lower levels.***
Source:Bard Google.com
