Inflation speeds up in April as consumer prices leap 4.2%, fastest since 2008

[bitmover]

I  was surprised today with CPI (Consumer Price Index) data from united states. Just in April, inflation (CPI) raised 0.8%! This is a lot for a country like US. The expected by markets specialists was 0.2%

Inflation in April accelerated at its fastest pace in more than 12 years as the U.S. economic recovery kicked into gear and energy prices jumped higher, the Labor Department reported Wednesday.

The Consumer Price Index, which measures a basket of goods as well as energy and housing costs, rose 4.2% from a year earlier. A Dow Jones survey had expected a 3.6% increase. The month-to-month gain was 0.8%, against the expected 0.2%.

https://www.cnbc.com/2021/05/12/consumer-price-index-april-2021.html

This has a huge impact on interest rates all over the world!

Even United States cannot sustain all those stimulus (trillions) without consequences

Just HODL!!

[Hydrogen]

No one could have predicted printing greater amounts of fiat to fund economic stimulus would increase inflation. Even residents of zimbabwe and venezuela could not have predicted this outcome. Joking aside, I'm certain many believe exactly this which is a bit sad.

It helps to remember inflation terminology was redefined around the 1970s to paint a rosier picture of the economy. What economists call 3% inflation today, would amount closer to 10% inflation using the old terminology.

The only positive I see here is my personal surprise circumstances aren't worse. It seems like life is throwing multiple apocalyptic scenarios at us at once. Pandemics, lockdowns, climate change, vaccines, tax hikes, fuel shortages, electrical grid blackouts. We're lucky things aren't worse than they are.

I wonder if everyone is preparing for the worst. Or if we are still assuming this will blow over and life will return to normal.

[mojun7982]

I  was surprised today with CPI (Consumer Price Index) data from united states. Just in April, inflation (CPI) raised 0.8%! This is a lot for a country like US. The expected by markets specialists was 0.2%

Inflation in April accelerated at its fastest pace in more than 12 years as the U.S. economic recovery kicked into gear and energy prices jumped higher, the Labor Department reported Wednesday.

The Consumer Price Index, which measures a basket of goods as well as energy and housing costs, rose 4.2% from a year earlier. A Dow Jones survey had expected a 3.6% increase. The month-to-month gain was 0.8%, against the expected 0.2%.

https://www.cnbc.com/2021/05/12/consumer-price-index-april-2021.html

This has a huge impact on interest rates all over the world!

Even United States cannot sustain all those stimulus (trillions) without consequences

Just HODL!!

There are now countries that expect to have an inflation of up to 8% very soon. I am not talking about developing nations, but industry nations. That speaks in favor of non-inflationary assets so we'll find out soon what that means for Bitcoin. The high inflation rates are already said to be inevitable.

[mersal]

I wonder if everyone is preparing for the worst. Or if we are still assuming this will blow over and life will return to normal.

Already it is, no matter how good your are in the financial status these things are going to hurt them but the poor people are going to starve and the new normal is not going to be smoother, the world isn't prepared to face this.

Anyway government will say that everything is under normal even if they are going to see the hyper inflation.

[Poker Player]

I did see it because I follow the stock market and it has had a negative effect on it.

There has also been a price drop in Bitcoin, but I'm not clear how much is due to this and how much is due to Elon Musk, but in theory, in the medium to long term, this should drive the price up. As bitmover ironically says, I don't know what the massive money printers expected. History teaches us that this inevitably ends badly, and we are starting to see the first signs of it.

[ashmodeus]

There has also been a price drop in Bitcoin, but I'm not clear how much is due to this and how much is due to Elon Musk, but in theory, in the medium to long term, this should drive the price up.

yep , its totally make a madness for price of bitcoin , the simple word , bitcoin just stay at the same level , but the dollar getting weaken as the inflation come . i just wonder why gold still doesn't up ?

[stompix]

Even United States cannot sustain all those stimulus (trillions) without consequences

It's not just that, if they would have simply injected those trillions two years ago the effects would have not been that bad.

But right now you've just gone through a pandemic, a lot of the industry was shut down, logistic chains are messed up and until everything is restored production is not yet at full throttle, if we look just at the car manufacturing industry you will see how it was impacted by different shortages, not just chips but with a lot of components. You can't have factories with millions of workers that were producing clothes for half of the globe shut down for 3 months and then suddenly everything back to normal. To make things worse when the quarantine was lifted there were little to no orders from the western world as they didn't anticipate the return to normal would be that soon.

One of those clear examples is wood, nobody expected that construction will resume at that pace, nobody could have made stocks of it, and even if they could have done they thought they will not sell even the inventory they had when the quarantine hit their business, now they simply can't keep up with demand.

On top of all that, what would be the worse action to take, just looking from the inflation point of view?
Print more money, creating an inflated demand for goods while the offer is not there, more money to spend than usual when there is less tan can be bought than in a normal year, of course, prices will go up for every single damn thing, it's a normal consequence everyone should have taken as granted.

This has a huge impact on interest rates all over the world!

Yeah, because as I always said, when the US makes a wrong turn we all over the world end up with a broken neck.
They are printing trillions, it's normal they will artificially offset all balances and then everyone on this path will suffer the consequences, some will be hit worse some will manage to slip through if they are smart enough and they can cut all connections but this will never work with large countries, smaller ones might do it, we in the EU will get the short straw as always.

One good part is that some of this inflation is being fueled by those gaps between production and demand, it will not and it can't continue at this pace but it will take some time till things settle. The other part, that is generated by printing money will of course not slow down and it will only be amplified by future money printing, as there will be more, I'm pretty sure of it.

[Lorence.xD]

This is for the US only though. I have read some articles regarding this inflation happening and a lot of them interviewed economist around the world said that we shouldn't worry about this kind of inflation because it naturally happens plus this isn't the first rodeo of US in terms of inflation because during the 2008 recession, they did giveaway cheques too. But you also have to be prepared for the worst, invest in something that will protect your money.

[paxmao]

It is sad, but bad news for the world sometimes means good news for bitcoin. The whole purpose of having an asset that is not printed as the politicians please is to profit or at least not being damaged by situations such as this. The COVID forced US, EU, China, UK, and many other governments to go over what could be considered reasonable and now inflation is going to be difficult to control.

The good takeaway is that companies that are living of cheap money may find themselves having to deal with real life out there when rates are adjusted.

There is also a worldwide problem with the raw materials and other items that are usually produced overseas. The insufficient production during COVID is creating shortages.

[hugeblack]

I do not think it is not a problem unless CPI (Consumer Price Index) continues to grow and COVID-19 pandemic strengthens with the weakening of the global vaccination campaign.

$ 1.9 trillion has been printed, so it is only natural that an increase will occur for a temporary period until we reach the saturation point away from the overshot.

The United States is able to control inflation, but a weak policy or no change in interest rates will make fixing solutions more difficult.

[bitmover]

The United States is able to control inflation, but a weak policy or no change in interest rates will make fixing solutions more difficult.

I agree. Every country is able to control their problems, but sometimes politicians do not have the correct incentives to do so, and the situation becomes more and more difficult.

In Brazil we had problems with inflation for decades (about 80% a month), and the government never really solved because the solution was to reduce government spent, which is a very unpopular measure. Who, in third world country, would vote to see subsidy reduction, stimulus reductions, raise in interest rates, wage reduction and so on?

In USA situation is way better, and certainly they are able to control it. The problem will be if the politicians will fix it asap or if they will try to postpone to win elections ...

[tbterryboy]

Inflation hasn't been going up in just one place, it has also been happening in other places and my country has been one of the countries where this is a problem. A lot of things in the market that we used to buy for a token are now high in price, prices has seriously gone up, and the most annoying part of all these prices going up is that some companies still shrink the size of their products, I just don't get why they do such a thing, if they know they are going to shrink the price, isn't it best that they leave it at that same rice than inflating the price?

Then if they decide to increase to increase the price, they should leave it at same quality and quantity as it used to be. I hope that we are able to get out out from this big mess that we have landed ourselves.

[verita1]

I agree with OP! The effect of inflation was expected to happen, as much was said last year and we are already beginning to notice the indicators in the USA.
Fortunately in that country the vaccination program against Covid19 has been a success as we have seen recently in the news media. "People who are fully vaccinated against Coronavirus can stop wearing masks indoors, with some limitations."
With this good news, the economy will re-activate with better momentum to avoid the negative effects of the recession.