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American shoppers feel pinch of higher prices


Kendy

American shoppers feel pinch of higher prices
US President Joe Biden (GP)

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Washington – American shoppers, especially those on low incomes, have felt the pinch of higher prices, with annual inflation at rates not seen for 40 years.

The latest figures show prices rose 6.8 per cent in the year to November.

Bibi who works as a cleaner in Harlem, New York, said she has had to cut back as a result, sometimes buying just one meal to share with her 27-year-old son.

“We don’t have any choice,” she said, “I can’t afford to cook.”

“I take a little bit then I give him more because a mother is always going to do that for her child.”

Price rises have pushed up food shopping bills, and petrol prices jumped 6.1 per cent, while the cost of second-hand cars and rent also rose.

While the monthly pace of price rises at 0.8 per cent eased a little compared to October’s 0.9 per cent, people like Bibi have felt the cumulative effects on their budgets.

Patricia, who has just shopped in the local supermarket, said her bill is about $30 a week more than it used to be, so she’s replaced chicken and pork chops with more vegetables, although prices for fresh produce are also higher she said.

“It affects me a lot right now, I’m not working,” she said.

Maria has just retired and said she’s noticed that what she buys is not only pricier but often smaller too, especially the bagels.

“I’m not going to buy them again for a long time. They used to be big bagels, now they’re smaller and more money,” she said.

Prices for American consumers are rising at their fastest annual rate since June 1982. But the impact is felt more amongst those on the lowest incomes, with the least room to manage.

Rising inflation is also putting pressure on President Biden as he tries to pass his $1.9tn (£1.4tn) social spending bill.

Some economists blame the president’s previous spending programmes, designed to offer support amid the Covid pandemic, for exacerbating price increases.

Giving it gas

“One of the major reasons we have inflation is because the government spent so much money,” said Christopher Campbell, chief strategist at Kroll a risk consultancy, and a former Treasury official under President Trump.

He argued that further spending could make inflation worse.

“At the end of the day we hopefully are on the tail end of the pandemic, and the government is still putting its foot on the gas, on the levels of spending.”

However Claudia Sahm, senior fellow at the Jain Family Institute and former Federal Reserve economist said government spending is not the cause. She said the reason inflation has persisted is because the pandemic has not been brought under control, affecting the supply of things like cars, fuel and food.

“The longer the COVID-related disruptions last, the more that starts to spread into the prices of goods,” she said.

She said with energy prices falling recently, inflation should start to ease.

“There are signs that we may be turning the corner soon, but Omicron is a new wild card.” (BBC)