Prices continue to climb in the United States, where inflation reached a new high in March, the first month fully affected by the repercussions of the war in Ukraine, in particular on energy, a thorn in the foot of Joe Biden.
Inflation in March reached its highest level since December 1981. Prices rose 8.5% compared to March 2021, once morest 7.9% in February also year on year, according to the consumer price index. consumption (CPI) released Tuesday by the Department of Labor.
March is the first month to fully integrate the effect of the war in Ukraine, which began in the very last days of February.
“There is no doubt” that the rise in energy prices is “related to Russia and the war”, commented the economic adviser to the White House, Brian Deese, on the CNBC channel.
A direct response to the Republican opposition, which criticizes the president for his inflationary policy.
“These high prices are hitting people in the wallet and creating uncertainty, so we have to do everything we can to bring (them) down,” he added.
The White House had taken the lead on Monday, warning that inflation would be ‘extraordinarily high’, and on Tuesday announced a series of initiatives to increase biofuel use and production, in hopes of lowering prices. at the pump.
Because following having already announced historic withdrawals from the United States’ strategic oil reserves, President Joe Biden finds himself running out of leverage to stem what the White House invariably calls the “Putin effect” on inflation, in a so far unsuccessful attempt to mitigate the political cost to the Democrat.
The American president, who will face a difficult legislative election in November, goes on Tuesday to a biofuel manufacturing site in Iowa, a rural state in the Midwest considered to be highly strategic on the political level, and which had mainly voted for the Republican Donald Trump in 2020.
– Cheaper used cars –
Between February and March, inflation also accelerated, to 1.2%, once morest 0.8% between January and February. Gasoline prices alone soared 18.3% from last month, and accounted for more than half of that jump, adding to shortages of goods and labor.
The prices of housing and food also contribute to this increase, specifies the Department of Labor.
A glimmer of hope, however, excluding energy and food prices, so-called core inflation slowed compared to February, to 0.3% from 0.5%.
Thus, the prices of used cars, which have been driving inflation for months, fell in March (-3.8%).
On the other hand, over one year, underlying inflation accelerated, and reached 6.5%, its highest level since August 1982.
– Low-income families –
“The rise in commodity prices linked to Russia’s invasion of Ukraine is at the origin of this very high inflation figure”, also commented a governor of the American central bank (Fed), Lael Brainard, during an interview with the Wall Street Journal.
This war “is a very important contributor to inflationary pressures”, she added, stressing that “these price increases are particularly painful for low-income families who spend a greater share on food and transport”. .
The official also mentioned China’s zero-Covid policy, which “seems to have a noticeable effect on activity”, and might thus weigh on supply problems.
Inflation, which reduces household purchasing power, has been above the Fed’s 2% target for a year now. The month of March is even the sixth in a row to record a price increase of more than 6%.
The CPI index is the one on which pensions are indexed, in particular. The US central bank (Fed) favors another index, the PCE, which rose 6.4% year on year in February.
The institution began in mid-March to raise its key rates, to increase the cost of credit and thus slow down consumption and investment. She also warned that she would continue to tighten monetary policy in the coming months.
The rates, which were in the range of 0 to 0.25%, are now between 0.25 and 0.50%.
