Inflation in the US has been worsening lately. It has now soared to become the highest in 40 years.
This development has been giving sleepless nights to the American consumers as it has wiped out pay raises and reinforced the decision of the Federal Reserve to begin raising the borrowing rates across the economy.
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On Thursday, the Labor Department said that consumer prices jumped 7.5 per cent last month as compared with last year. It seems to be the steepest year-over-year increase since February 1982.
The inflation in the US was 0.6 per cent from December to January. The prices also rose 0.7 per cent from October to November and 0.9 per cent from September to October.
The inflation seems to have risen last year due to the shortages of supplies and workers, ultra-low interest rates, heavy doses of federal aid and robust consumer spending.
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There seems to be only a few signs that it may easesignificantly anytime soon.
Some economists are of the view that the Fed could raise its key rate in March to tackle the rise in inflation. It could be a one-half a percentage point hike and not its typical quarter-point raise.
(With inputs from agencies)