The current rate of inflation is the highest it has ever been. Given the pandemic and the rising interest rates of the Federal Reserve, there’s no doubt that inflation was bound to happen. To get a better perspective on how inflation has been affecting U.S. citizens, it’s best to look at the comparison of consumer goods prices now, last year, and in the pre-pandemic days. What’s been causing inflation in the United States?
Other than the obvious causes of inflation in the United States, such as the pandemic and the intensifying conflict between Ukraine and Russia, there’s one other factor that contributes to inflation's sudden and rapid growth. The Federal Reserve plays a major role in the growth of inflation, and here’s why. When prices began to rise little by little in early 2021, the Fed failed to act on it ASAP. This misstep led them to where they are now, struggling in an uphill battle with inflation. While the money supply is expanding at a slower rate now compared to 2020 and 2021, that won’t be able to settle down the inflation peaks we’re experiencing now and later this year. Unfortunately, given the current geopolitical environment as well as structural changes to the global economy and supply chains, we may experience higher inflation in the upcoming year. According to Fed officials, they won't stop raising rates until they’re certain that inflation is slowing down. According to the American Century, the Fed is behind curtailing inflation, so we’re faced with a possible 0.75 point increase for July next year. Monetary policy must be viewed as one of the major causes of inflation. This is to eradicate any misunderstandings among people who think that central banks have nothing to do with it in the first place. Comparison of consumer goods prices
According to the Bureau of Labor Statistics, this chart represents the comparison of consumer goods prices now, last year, and during the pre-pandemic days.
Month/Year |
Bananas, per lb. |
Oranges, Navel, per lb. |
Bread, white, pan, per lb. |
Tomatoes, field grown, per lb. |
Chicken, fresh, whole, per lb. |
|
Oct. 2019 |
0.573 |
1.47 |
1.325 |
1.779 |
1.538 |
|
Oct. 2021 |
0.6 |
1.49 |
1.526 |
1.892 |
1.523 |
|
Oct. 2022 |
0.634 |
1.73 |
1.814 |
1.974 |
1.863 |
|
|
|
|
|
|
|
|
Month/Year |
Electricity per KWH |
Eggs, grade A, large, per doz. |
Gasoline, unleaded regular, per gallon |
Ground chuck, 100% beef, per lb. |
Utility (piped) gas per therm |
Milk, fresh, whole, fortified, per gal. |
Oct. 2019 |
0.136 |
1.282 |
2.673 |
4.027 |
1.041 |
3.119 |
Oct. 2021 |
0.142 |
1.821 |
3.385 |
4.869 |
1.383 |
3.663 |
Oct. 2022 |
0.166 |
3.419 |
4.016 |
4.789 |
1.668 |
4.184 |
As we can see from the chart, there was a significant increase in consumer goods prices for the month of October this year. Compared to 2019 and 2021, the prices this year are much higher, and seeing as how inflation keeps increasing, it’s less likely for these prices to go down any time soon.
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