Inflation rates have accelerated tremendously last month. In February inflation rose to 7.9% from a previous 6.4%, a dramatic rate of increase not seen in over 40 years. Economists predict that this rate of inflation will only get worse throughout March. Gas prices are already extremely high, with the average price per gallon across the country reaching $4.33 according to AAA.
The price increases are affecting budgets of most households, as prices for daily necessities continues to increase. Biden has acknowledged that inflation is high, and has placed the blame on Putin. President Biden spoke, "Today's inflation report is a reminder that American's budgets are being stretched by price increases and families are starting to feel the impacts of Putin's price hike."
Even as we emerge from the pandemic, the war in Ukraine may continue to impact supply chains. The war has already placed a tight hold on gas prices. However, price gains in energy may start to affect other sectors. Chip shortages may continue as well as Ukraine is an important producer of neon. This could add more pressure to already tight bottlenecks in automotive and tech industries. Rent has also seen an increase by 0.6% from the previous month.
Wage increase haven't kept up with the speed of inflation. Despite White Houses efforts to offset rising costs, inflation doesn't seem to cool off any time soon. Budgets of common households will become tighter, and lifestyles adjustments will need to be made. We will have to wait and see how the Biden administration tries to respond to rising costs. His response may play a major role leading up to the November midterm elections.
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