TEHRAN (Iran News) – The latest data shows Inflation levels in the United States have hit another 40-year high rising to 8.6 percent for the month of May with the conflict in Ukraine, which experts say was sparked by the U.S. itself, playing a role.
Last month, the cost of key products such as gas and food as well as other necessities jumped once again, raising U.S. inflation to a fresh four-decade high and giving American households no breathing space from the rising cost of living.
The U.S. Department of Labour says Consumer prices rose 8.6 percent in May from 12 months earlier, faster than April’s year-over-year rise of 8.3 percent.
Referring to the month-to-month results, the cost of goods jumped one percent in the month of May alone, a huge rise in comparison to the 0.3 percent increase from March to April.
America’s uncontrollable inflation is hitting ordinary households strongly. Consumers will be further concerned by economists who are predicting very little easing of the inflation rate this year.
The cost of living is placing a heavy burden on families, forcing them to pay much more for food, gas, and rent while reducing their ability to afford other basic services such as a haircut.
Lower-income and Black and Hispanic Americans, in particular, are suffering more because, on average, a larger proportion of their income is consumed by necessities.
High inflation has also forced the Federal Reserve into what will likely be the fastest series of interest rate hikes in three decades but critics say it will be a difficult balancing act for the central bank over fears the quick measures may tip the economy into recession and make matters worse for ordinary households.
Surveys indicate that Americans view inflation as the nation’s biggest problem and most disapprove of President Joe Biden’s handling of the economy.
In the run-up to the midterm elections later this year, Congressional Republicans have been taking advantage of the situation by slamming the Democrats on the issue.
But the real reason behind the record inflation is rising energy prices as a result of the conflict in Ukraine. The much higher gas prices are erasing the finances of millions of Americans.
Western sanctions on Russian oil and gas following its military operation in Ukraine further increased the costs at the gas pumps by limited international supplies.
The average price that Americans pay for gasoline is closing in on $5 a gallon, a massive drain on the wallets of motorists and other gas consumers.
According to the American Automobile Association (AAA), the nationwide average for regular gas is hovering at around $4.97 a gallon, up a quarter in just the last week and $1.90 more than motorists were paying a year ago.
GasBuddy, a service that helps motorists find deals on gas, has announced that the average surpassed $5 for the first time in the United States’s history.
Prices at the pump have been rising steadily for months, shooting past the $4 mark in early March. The cost of crude oil was rising even before Russia’s military operation in Ukraine which lifted the price of oil even higher.
California has the highest average price, at $6.40 a gallon, according to AAA. Several other Western states and Illinois are higher than $5.50.
It’s not just Americans that are paying more to fill up the oil tanks of their vehicles. This week, gasoline prices in one of America’s closest allies, the United Kingdom hit a record £182.3 per liter which is about $8.80 per gallon.
Analysts expect prices to keep rising until they reach a point where the cost of oil and gas becomes so high that demand for the commodity drops.
Analysts have no idea exactly when or where that might be. GasBuddy says “we’re not at the end of the road yet, we have very little margin for error this summer. We need every barrel of refining capacity we can get.”
Experts have pointed out that U.S. oil companies are very limited in numbers and therefore have no competition to bring prices down. In essence, they are able to keep the cost of gas for motorists as high as possible and for as long as they can make a significant profit at the expense of ordinary households struggling to make ends meet.
The oil prices are skyrocketing just as families try to cope with inflation in the cost of food, housing, cars, airline tickets, and other needs. On both sides of the Atlantic, pressure is growing on governments to take the necessary measures and help motorists.
n the UK, The Automobile Association (AA) said prices are “crippling the lives of those on lower incomes, rural areas, and businesses,” demanding the government intervene.
According to a new study from the Organization for Economic Co-operation and Development, the Ukraine conflict will lead to persistently higher inflation rates in rich countries this year.
In the latest of several reports on the global economic outlook published each year, the Paris-based Organization called on Western governments to avoid a repeat of the slow and unorganized response to the Covid-19 pandemic and act promptly to help those in need.
In response to rising inflation in the U.S., President Joe Biden promised that combatting inflation is going to be his “top economic priority,” but blamed Russia once again for rising inflation back at home.
On Friday Biden put Russia accountable for America’s economic woes for the umpteenth time saying “Putin’s price hike hit hard in [the month of] May here,” he said, blaming Moscow’s military action for the “high gas prices at the pump, energy, and food prices.”
He made no mention of the un presence sanctions imposed on Russia banning it from exporting just about everything.
Despite claiming to fight inflation, the
U.S. just recently announced more arms and other military equipment for Ukraine to prolong the fighting.
This would mark around a dozen times now, Washington has approved the delivery of arms to Ukraine.
Since the conflict began on February 24, the Biden administration has provided almost $4.6 billion in weapons to Kyiv.
The military aid will form part of the Additional Ukraine Supplemental Appropriations Act of 2022, which would offer over $40 billion in new financing to support the U.S. military response to the Ukraine situation.
U.S. arms manufacturers are the biggest beneficiary of the Ukraine crisis. And this comes as reports surface of Russian forces destroying Western arms deliveries.
On Sunday, the Russian military fired Kalibr cruise missiles hitting a large depot with U.S. and European weapons in Ukraine’s Ternopil region according to the Russian defense ministry. Russian forces also shot down three Ukrainian SU-25 fighter jets in eastern Ukraine, the ministry added.
The problem with Biden’s policy is that Ukraine is complaining about the lack of military support it is receiving. Critics say no amount of weapons will help end the fighting in the east of the country but will only prolong it whilst arms companies make more profit.
So why is Biden punishing U.S. households with further support for a war that can be ended with meeting Russia’s security guarantees?
Moscow sent the proposals months before fighting broke out in February this year, but Washington chose to ignore them. Since then it has also decided to ignore any push for a diplomatic solution.