US consumer prices post largest gain since June 2009 as inflation jumps

• Financial

On Wednesday, US Labour Department data had unwrapped a pandora’s box of inflation-surge with US Consumer Prices Index, a gauge that measures the average prices of a basket of consumer goods and services, accelerating by the most since 2009 last month, sending shockwaves across global equity market while restoring a safe-haven bid for the American currency alongside US Treasury bond notes.

In point of fact, latest US Labour Department data underpinning a strong build up of underlying price pressures came forth as a ballooning domestic demand coupled with a robust re-opening of US economy amid massive Government stimulus had been facing off a widespread supply restrains, ramping up consumers’ goods prices while perking up inflation much earlier than anticipated which in effect led to analysts’ belief that a likely short-term inflation-hike might be metamorphosized into a longer-term lofty burden that might just prompt the US Fed to intervene.

Nonetheless, Fed Chair Jerome Powell was quoted saying last week that a telescoped supply chain in the United States would likely to ease off in a near term, as more and more Americans step up outdoor activities following an acceleration of vaccination drive.

US Consumer Prices Index jump by the most in 12 years last month

On top of that, according to US Labour Department data released earlier in the day, the Consumer Prices Index soared 0.8 per cent in April following a 0.6 per cent increase in March on a year-on-year basis, marking up the strongest gain since June 2009, while nearly a 10 per cent upsurge in the prices of used cars and trucks amid a steep chip shortage last month, the largest since 1953, accounted for nearly a third of Consumer Prices Index’s gains last month.

Meanwhile, solacing market frets that a robust rise in underlying price pressure might galvanize a longer-term hike in inflation indicators, a director of Johns Hopkins University for Financial Economics, Robert Barbera said, “This is not a sign of an inflation problem.

We have the capacity to produce this stuff, we simply need time to get things back on line. ”