Inflation Hits New Highs in U.S., Europe

Date: 03 October 2021 - 21:29

News ID: ۹۵۱۳۶

WASHINGTON (AP) -
Inflation has reached new highs in the United States and Europe as rising energy prices and supply bottlenecks restrain an economic recovery from the pandemic in both economies.
The U.S. Commerce Department reported that prices rose 4.3 per cent in August from a year earlier. While only slightly higher than the previous month, it was still the largest annual increase since 1990. Energy costs have jumped nearly 25 per cent in the past year, while supply backlogs have pushed up prices for cars, furniture and appliances.
In the 19 countries that use the euro, inflation increased to 3.4 per cent in September, from 3 per cent in August, the statistics agency Eurostat said on Friday. That’s the highest since 2008. Energy prices have risen 17 per cent in the past year, led by natural gas and electricity.
Price gains can erode workers’ purchasing power and have complicated President Joe Biden’s ambitious spending plans, as well as raised pressure on central bank leaders in the U.S. and Europe.
Supply shortages for everything from computer chips to furniture to paint and chemicals have driven up prices, with the economic rebound from the pandemic-fuelled recession catching many companies flat-footed.
Economist claims that European inflation will be temporary hasn’t removed fears of price spikes and gas shortages this winter due to an extremely tight market for natural gas.
Natural gas traded at €94.46 ($109.36) per megawatt hour in Europe on Friday, almost five times higher than at the start of this year, pushed higher by strong demand in Asia, less supply from Russia, and cold weather this past winter that left reserves depleted.
Higher prices for natural gas and electricity have spread concern among European governments, which are taking steps to limit rises in residential utility bills through subsidies and tax cuts. Natural gas is a key fuel for generating electricity, so higher gas prices mean costlier electricity bills.