Washington D.C., (Business News Report) – Inflation in the U.S. will decline in the second quarter of this year 2022, the International Monetary Fund (IMF) expected.
Kristalina Georgieva, IMF’s Executive Director, said that inflation in the U.S. is expected to decline in the second quarter..
“This is subject to dealing with supply chain constraints, and what we are seeing are some promising signs that some progress is being made in that regard,” Georgieva said in an interview with CNBC.
In a related context, President Joe Biden said that there are indications of an improvement in the inflation figures released on Wednesday. He said that there is a slowdown in price increases in some key sectors. Still, the overall rise was the highest in four decades.
“Today’s report—which shows a meaningful reduction in headline inflation over last month, with gas prices and food prices falling—demonstrates that we are making progress in slowing the rate of price increases,” the president said in a prepared statement.
The government had confirmed that U.S. consumer goods prices rose last year at their fastest pace in four decades. Strong inflation wave weakened public support for Biden even as the economy recovered after the shock caused by the pandemic.
The 7% increase in the consumer price index over the 12 months ending in December was the highest since June 1982. Meanwhile, the prices of a range of commodities, especially housing, cars and foodstuffs, rose.
Since taking office last January, Biden has presided over a rapidly expanding economy that has seen millions of people who lost their jobs due to the COVID-19 pandemic return to work.
A rebound in demand, labor shortages and problems in the global supply chain caused prices to rise last year at a faster rate than ever before.
In a related context, consumer prices in the United States rose strongly in December. The annual increase in inflation was the largest in about four years. This supports expectations that the Federal Reserve will start raising interest rates as early as perhaps in March.
The U.S. Labor Department said the consumer price index (CPI) rose 0.5% last month after rising 0.8% in November.
In the 12 months to the end of December, the CPI jumped 7.0%. That was the biggest year-on-year increase since June 1982 and followed a 6.8% increase in November.