Rising prices in the U.S. have caused consumers to rethink their spending habits. The consumer price index jumped 0.9% in June, which is the largest one-month increase in 13 years, reports CNN. Prices were up 5.4% over the past year, the biggest increase in inflation in 13 years.
The rise in inflation is being partially attributed to the global microchip shortage, reports MarketWatch, pushing up prices of new and used cars. Americans are also going out and spending more at retailers, restaurants and on travel. Gas prices rose 45.1% compared to a year earlier and food prices are up 2.4% in the last 12 months, yet prices for dining out are up 4.2%, added CNN. Average gas prices are around $3.15 a gallon, about $1 more per gallon than the same time last year, according to data from AAA and reported by MarketWatch.
However, MarketWatch noted that top economists within the Biden administration, including Federal Reserve Chairman Jerome Powell, claim that price increases are temporary and that inflation will settle as more Americans return to their normal way of living.
“What we’re seeing now, we believe, is inflation in particular categories of goods and services that are being directly affected by this unique historical event that none of us have ever lived through before,” Powell said during Congressional testimony last month, reports MarketWatch.
Despite the rise in prices, MarketWatch noted that Americans expect food and gasoline prices to fall by 0.9% and 0.7% in the coming year compared to May predictions, according to the May and June Fed surveys.
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