Inflation in the USA
In January, the spending of consumers around the country increased significantly. Because of the harsh winter temperatures, there was an obvious need for heat in homes, along with other things like foods and household necessities because people didn’t want to go out as much. The Department of Commerce said spending rose 0.1% in December, also know that consumer spending accounts for ⅔ of the country’s economic activity. U.S. central bank tries keeping inflation either at or below 2%. PCE (Personal Consumption Expenditures) are the measurements in price changes for services and goods. PCE increased about 1.3% in the twelve months leading to January. That’s the biggest increase since October in 2014 and 0.7% of this occurred during December. Prices went up 0.3% and that’s without energy and food. Because of the increased consumer spending and rising inflation the Federal Reserve rose the benchmark interest rate in December that year. That’s the first time it’d been raised within the previous 10 years beforehand. Below the graph shows the inflation rates in 2015 and 2016, and with interest rates rising there’s a very small chance for a jump in growth of the economy for America.
One of the main causes for the increase of consumer spending was a rise in income across America (around 0.5%). June had the 2nd largest increase and add a another 0.3% to December. Also, a few states minimum wages have been going up, about 0.2% in December. Average salaries increased about 0.6%. Since minimum wage is increasing around the country there’s going to be a crooked value of money in America.
"Current US Inflation Rates: 2006-2016." US Inflation Calculator. 2008. Web. 03 Mar. 2016.
Reuters. "US Consumer Spending Rises; Inflation Stirring." CNBC. 2016. Web. 03 Mar. 2016.