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USA: inflation accelerates in April to 3.6% over one year

The PCE index shows its largest increase since 2007. The rise in prices concerns both goods and services.

Inflation in the United States accelerated in April, to 3.6% year on year, its largest increase since 2007, as prices were pulled by strong demand and global supply difficulties, according to data released on Friday. by the Commerce Department.

The price hike affects both goods and services, the Commerce Department said in its statement. This is much more than in March, when inflation was 2.4% year-on-year, according to data revised upward.

Energy prices jumped 24.8%.

The increase is all the stronger over one year, as prices fell in spring 2020, under the effect of containment measures in the face of the COVID-19 pandemic.

Inflation over one month stands at 0.6%, as in March, according to data also released on Thursday.

These figures should fuel fears over inflation that is too high, and above all lasting. This should also push the American Central Bank (Fed) to start considering tightening its monetary policy, as demanded by some of its officials, although its president insists that it is too early to consider such an action at the risk of slowing the economy. reprise.

In addition, household income recorded a historic drop of 13.1% in April, a dip that was not as strong as expected. These revenues were inflated in March (+ 20.9%) by checks sent to millions of homes by the federal government as part of the latest stimulus plan. Aid paid to the unemployed has also decreased, specifies the Department of Commerce.

This slowed spending growth, up 0.5% from 4.7% in March.

Spending on services increased by $ 112.6 billion, with Americans notably benefiting from the reopening of leisure activities, restaurants and hotels, with the vaccination of a large part of the population.

In contrast, spending on goods fell by $ 32.3 billion.

Excluding volatile energy and food prices, so-called core inflation is 3.1% over one year, and 0.7% over one month, a little more than expected by analysts.

The US Central Bank (Fed) is aiming for 2% inflation in the long term, and believes, in order to reach this target, that it will have to be exceeded for a while, without immediately tightening its monetary policy as this would risk slowing the recovery .

Despite the reassuring remarks of many officials, such as those of the Fed, the Secretary of the Treasury, Janet Yellen, or the IMF, who assure that the rise in prices is linked to transitory factors and should only last a few months, the fears are strong about strong and lasting inflation.

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