The latest report released by The U.S. Bureau of Labor Statistics states that inflation in the month of April 2022 is up to 8.3%. Meaning that goods and services were 8.3% more expensive in April 2022 than in April 2021. This year’s rate almost doubled the rate of April 2021 when it was 4.2%. Also, the rate for April 2022 follows the highest year-over-year rate of inflation recorded for over 40 years, 8.5% in March 2022. The circumstances that caused the rise seem to still be present in the month of April 2022, because when compared March 2022 the inflation rate only decreased by 2.4% or 0.2 percentage points.
The food sector reached an alarmingly high rate of inflation of 9.4%, which is greater than the overall inflation of the month of April. The rise in food prices could be due to the weather changing into this warmer season that can cause some damage to the harvest; or the rise in food inflation can also be caused by supply chain issues. The increase of food prices will not only affect the prices in restaurants, but also those in grocery stores. This is worrisome because food is a necessity and further inflation can limit access to food in the future as well as limit consumer spending in other areas.
As expected the biggest influence on April’s inflation rate was the energy sector, surpassing the overall inflation rate with a rate of 30.3%. The recent spike in the prices for oil and gas affecting the energy sector is due to the Russia-Ukraine conflict that has and will continue limiting the supply of these goods.
The Federal Reserve is expected to continue raising interest rates, this along with other monetary policy should help control future inflation. Interest rates were increased in early March to 0.40 and it was increased once again to 0.90. The Federal Reserve hadn’t increased the interest rates since 2015. Though these are historic inflation rates the increase by the Federal Reserve should have a positive impact stabilizing inflation rates.