FMCG prices in America skyrocketed during the COVID-19 pandemic due to labor shortages and supply chain problems. According to analysts, the rise in prices worsens the mood of the country’s population and causes political damage to US President Joe Biden.
According to the latest consumer price index released by the US Department of Labor, in October the cost of food in the United States was 5.4 percent higher than a year ago. At the same time, inflation was 6.2 percent: this is the largest annual jump in the state consumer price index over the past three decades. High inflation is a major problem for fixed income people and seniors like Rink, a retired woman from Washington DC. She relies only on social security, and on her $ 1,578 monthly allowance, the retiree can no longer afford the grocery basket she did a year ago. “The cheapest product I can buy right now is $ 11 chicken,” Rink told National Public Radio.
Americans admit that the sharp increase in food prices over the past year has significantly reduced their monthly budget. According to Bank of America Global Research’s October U.S. Consumer Survey, nearly 60 percent of respondents said grocery stores experienced the sharpest price increases, followed by restaurants and take-out.
Overall, in October, US chicken prices were 8.8 percent higher than a year ago. Prices for beef and pork rose even more, by almost 20 percent. Energy prices are among the main drivers of inflation. The average American family now pays nearly 50 percent more for gas than a year ago and pays 28 percent more for the natural gas they use to heat their apartment building. At the same time, real average hourly wages adjusted for inflation decreased by 1.2 percent per year compared to 2020. The cost of doing business in America also rose during the pandemic as companies have to spend more to make businesses safer during the pandemic.
The White House and the Federal Reserve have called the rise in inflation a “temporary byproduct” of the coronavirus pandemic, which has disrupted supply chains and left many Americans unemployed. However, like the pandemic, the rise in prices, according to analysts, does not seem to be going away anytime soon.
Inflation is no longer confined to the few sectors of the economy hardest hit by the pandemic, such as construction or the car trade. Experts predict a rise in prices in the coming months in other categories, including in the field of air travel and the cost of rent for businesses and individuals in the United States. As wages rise in the service sector, especially in such industries as the restaurant and hotel business, experts say, many such enterprises prefer to pass on additional labor costs to customers in the form of higher prices for the services offered. On average, the wages of waiters and hotel employees in America have increased by 5-10 percent compared to last year.
Rising prices and inflation are weighing on American sentiment. A study published by the University of Michigan on Friday shows that one in four people surveyed said their standard of living fell sharply in October due to inflation. According to experts, these data represent a serious political challenge for Biden, whose economic policy approval rating this week fell below 40 percent for the first time.
Meanwhile
“The spike in inflation will only get worse, with dire consequences for the US economy,” Peter Schiff, chief economist and global strategist at think tank Euro Pacific Capital, told Fox News. According to him, high inflation could push the American economy into recession. Some experts believe President Biden’s adoption of a trillion-dollar infrastructure spending package could push prices even faster.
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