'An Event in 40 Years' US Inflation Rises Over 7%... Biden Says "Food and Energy Prices Have Dropped" (Summary)

December CPI Soars 7%
High Likelihood of Continued Rise This Year
Biden Claims "Inflation Is a Global Phenomenon... US Economy Growing Strongly"

[Asia Economy New York=Correspondent Baek Jong-min] The inflation rate in the United States has reached 7%, marking a 40-year high. President Joe Biden welcomed the slight decline in food and energy prices, but forecasts are spreading that the surge in inflation will not easily stop.

US CPI Inflation Rate Trend (Source: US Department of Labor)

The U.S. Department of Labor announced on the 12th (local time) that the Consumer Price Index (CPI) for December last year rose 7.0% compared to the same period last year. This is the highest level since June 1982. The CPI matched the market expectations compiled by Dow Jones. The CPI recorded over 6% for three consecutive months. Compared to November, the previous month, the CPI increased by 0.4%.

The core CPI, which excludes volatile food and energy prices, showed a higher-than-expected increase. The core CPI rose 5.5% compared to the same period last year and increased 0.6% month-over-month. Market expectations were 5.4% and 0.5% increases, respectively. The core CPI also recorded the highest increase since February 1991.

President Joe Biden emphasized in a statement on the CPI that food and energy prices have declined, saying, "Efforts to curb inflation are beginning to show results." The Biden administration has recently been actively working to influence meat and gasoline prices.

Biden’s remarks are interpreted as referring to the decline in meat prices. Beef prices fell by 2%, and pork prices by 1.1% compared to the previous month.

Gasoline prices also slightly decreased, but with West Texas Intermediate (WTI) crude oil surpassing $80 per barrel this month, there is a high possibility of prices rising again.

CNN also pointed out that while meat prices slightly dropped, other food items increased more significantly.

President Biden further stated, "Inflation is a global phenomenon occurring mainly among advanced countries trying to emerge from the COVID-19 situation. The U.S. economy is fortunate to be growing the fastest in the world."

Experts predict that the rise in inflation will not easily stop. Professor Son Sung-won of Loyola Marymount University noted that soaring housing rents and wage increases will lead to price hikes, maintaining inflationary pressures. Housing rent accounts for about 30% of the CPI calculation. It rose 4.1% last year, but further increases are expected. Professor Son emphasized, "You cannot put the 'inflation genie' back into the bottle."

One day earlier, Jerome Powell, Chair of the Federal Reserve (Fed), announced that he would actively raise interest rates to curb inflation. Powell forecasted that the inflation surge would stabilize.

After the CPI announcement, the U.S. financial market is stabilizing. The 10-year Treasury yield fell by 0.023 percentage points to 1.723%.

As of 12:20 PM, the Dow Jones Industrial Average is up 0.1%, the S&P 500 is up 0.26%, and the Nasdaq Composite is up 0.29%.

This content was produced with the assistance of AI translation services.