Almost everything is getting expensive in the US even as the population goes back to spending on shopping, eating out in addition to travelling.
This was shown by the increased consumer prices in April, a sign that there is a high demand for commodities than what is delivered in stores because of supply chain interruptions.
The Consumer Price Index that measures changes in prices of food, clothing and other items rose to 0.8% in April. The increase is 4.2% higher than 2020 and the most since September 2008.
The food index rose by 0.4% and car sales by 10% in April, as well as motor vehicle insurance, housing, household furnishings, recreation and airlines.
The core inflation – minus energy prices and more volatile food – was 3% which is the highest since January 1996. Similarly, core prices went up 0.9%, which is the biggest monthly increase in 39 years.
This is an indicator that the US economy is getting on track from the 2020 downturn. Consumer spending is driven by stimulus checks drive, reopening of businesses, more Americans getting their vaccine shot and increased confidence.
Further, used cars and truck prices rose by 10%. The coronavirus pandemic impacted the auto market negatively due to lockdowns that made people remain indoors and avoid public transportation whenever they stepped outside. Today, they are still reluctant to use public transport to go back to work, thus increasing prices and demand for used cars.
Other key elements that led to April price increases were airline tickets, shelter and lodging, recreational activities, furniture and car insurance. Businesses in the travel industry closed or operated on a very minimal scale. However, Americans are keen to travel again as president Biden administration lifts Covid-19 restrictions.
More so, essential grocery items went up among major grocery chains. A pound of bacon rose by 5.5% in some states, and chicken breast went up by 5%-12% among popular grocery items. Others are Lumber, steel and copper prices as home building and construction reopens. The prices of electronics, cars and household appliances have also skyrocketed due to the worldwide computer chip shortage.
Aside from local supply chain and logistics challenges, some ranchers trimmed their heads, winter weather affected crop yields and reduced productions as factories suffered shortages of truck drivers, workers and supplies. However, the rising consumer demand and spending as more diners resume dining outside as well as limited deliveries as supply chains reel and repair has led to higher grocery prices.