June saw a slowdown in inflation, which came as a relief for consumers. The latest report from the Bureau of Labor Statistics revealed a 3% increase in the consumer price index in June 2024 compared to the previous year, down from 3.3% in May. This shows a significant improvement from the peak of around 9% seen two years ago.
Despite the heated discussions during the recent U.S. presidential debate, where President Joe Biden and former President Donald Trump pointed fingers at each other over inflation, economists stress that the causes of inflation are more intricate.
Much of the inflation surge was influenced by global events beyond the control of any administration. Disruptions stemming from the COVID-19 pandemic and the Russian-Ukrainian conflict have significantly impacted supply chains and market dynamics, leading to price hikes.
The Federal Reserve, which operates independently of the presidency, was criticized for reacting slowly to the rising inflation, prolonging the period of high prices. The policies implemented by both Biden and Trump, such as the pandemic relief packages, did contribute to inflation to some extent but were not the main driving forces.
Economists are in consensus that high inflation is primarily due to global supply and demand imbalances rather than the direct actions of any single administration.
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