By CultureBanx Team
- Consumer prices surged 4.2% in April, the biggest jump since 2008
- Increased prices affected a range of goods from big-ticket items such as used cars to kitchen staples such as bacon
No, you’re not imagining it, prices for a lot of things are on the rise. In fact, U.S. consumer prices surged 4.2% in April, the biggest jump since 2008. Even though the unemployment rate nationwide is falling, it stands at 9.6% for the Black community, which is the highest for any ethnic demographic. Price increases affected a range of goods from big-ticket items such as used cars to kitchen staples such as bacon, and all of this could further stagnate the economic recovery for people of color.
Why This Matters: Prices are spiking throughout the economy for a variety of reasons. A global microchip shortage that’s hurt car manufacturing has sent the prices of used cars soaring. Commodities from lumber to corn and other crops have risen dramatically, and many companies are passing those costs on to consumers, sending the price for new houses, food and more.
The accelerating inflation comes as companies have been forced to pay more to secure critical materials such as lumber and steel amid continued disruptions to the global supply chain. Not to mention that the government also pumped trillions of dollars into the economy in a bid to blunt the impact from the coronavirus, contributing to inflation. Inflation rose at its fastest pace in more than 12 years for April as businesses reopened and the pandemic eased.
The Fed wants inflation to be around 2% over the long term, and policymakers have committed to keeping interest rates near zero for the time being. Policymakers insist the increase in prices is going to be short lived or “transitory”, reflecting supply chain snarls and pent-up demand from Americans now happy to spend money on trips or outdoor activities.
Situational Awareness: For an economy finally starting to roar back from the pandemic recession, higher inflation poses a major potential risk. What matters most is how long these higher prices last.
CBx Vibe: “Money Save” Hyena & Rick Kalashh