US economy reports bad news, the road to "cooling down" inflation is more bumpy

On January 11, data from the US Department of Labor showed that consumer price inflation in the country in December 2023 increased more than expected, while President Joe Biden announced that he would continue efforts to control prices.

Americans shop at a supermarket. (Source: Reuters)

The consumer price index (CPI) in December 2023 increased by 3.4% over the same period last year, a stronger increase than the increase in November 2023.

The above data shows that the path to "cooling down" inflation is not easy.

However, core inflation, which excludes volatile food and energy prices, fell to 3.9% in the final month of 2023, the lowest since May 2021.

Commenting on the data, President Biden said the economy has created more than 14 million jobs since he took office and that wealth, wages and employment have increased more than under his predecessor. However, he said more efforts are needed to reduce inflation.

The US Federal Reserve (Fed) has been raising interest rates rapidly since 2022 and maintaining them at 22-year highs, aiming to reduce demand and control inflation in the long term.

Despite the December 2023 CPI increase, inflation has eased significantly from its peak of 9.1% in June 2022, while consumer spending and the job market remain strong.

That raised hopes the world's largest economy would have a "soft landing," with inflation cooling without triggering a recession.

* The US budget deficit has increased sharply in the first three months of fiscal year 2024 (October-December 2023) as tax revenues exceed spending and public debt service costs increase, according to data from the US Treasury Department.

Accordingly, the US government's budget deficit in the first three months of fiscal 2024 increased by 21% to $510 billion, higher than the $421 billion in the same period last fiscal year. The US public debt has now exceeded $34,000 billion.

However, government spending increased sharply during this period, with public debt interest payments increasing by $78 billion compared to the same period last fiscal year. Overall, state budget spending increased by $54 billion.

Government data also showed that areas with increased spending this quarter included military programs and programs under the US Social Security Administration. During this period, total US government spending reached $1.6 trillion.

(according to AFP)

Source: https://baoquocte.vn/kinh-te-my-bao-tin-khong-vui-con-duong-ha-nhiet-lam-phat-them-gap-ghenh-257132.html