Sully reacts to escalating worries as consumer prices shot up 0.8% in April
SAN DIEGO (KUSI) – A worrisome bout of inflation struck the economy in April, with U.S. consumer prices surging 0.8%, the largest monthly jump in more than a decade and the year-over-year increase reaching its fastest rate since 2008.
The acceleration in prices, which has been building for months, has unsettled financial markets and raised concerns that it could weaken the economic recovery from the pandemic recession.
One-third of April came from a record 10% increase in the price of used cars and trucks.
Wednesday’s report from the Labor Department indicated that that the 0.8% rise in prices that consumers pay for everything from food and clothes to new cars was the biggest one-month gain.
KUSI contributor Sully Sullivan joined Good Morning San Diego to discuss inflation. “Well, if the Federal Reserve starts to think there is a real problem with inflation, it could boost interest rates or taper its bond purchases sooner than expected – that would have huge consequences for financial markets,” said Sully.
However according to Fed Chair Jerome Powell, “An episode of one-time price increases as the economy reopens is not the same thing as — and is not likely to lead to — persistently higher year-over-year inflation into the future,”