AhlulBayt News Agency (ABNA): The inflation rate in the United States increased in April at the fastest pace in three years. This increase occurred under the influence of rising energy prices resulting from the U.S.-Zionist regime war against Iran. This comes as U.S. labor market data still indicate relative stability in the employment market despite increasing economic pressures.
According to a report by Al Jazeera, the Bureau of Economic Analysis of the U.S. Department of Commerce announced that the Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, increased by 3.8 percent in April compared to the same period last year, while this figure was 3.5 percent in March. This is the largest increase in U.S. inflation since May 2023.
This figure aligns with the forecasts of economists surveyed by Reuters. The index also rose 0.4 percent on a monthly basis in April, after recording a 0.7 percent increase in March.
This new rise in U.S. inflation has reinforced the likelihood that the Federal Reserve will maintain its current interest rate policy into next year, as concerns over continued inflationary pressures from rising oil and energy prices persist.
Pressures from the War Against Iran
The U.S.-Zionist regime's war against Iran has caused widespread disruption in global energy markets, especially after the closure of the Strait of Hormuz, through which approximately one-fifth of global oil and liquefied natural gas trade passes.
These developments have led to increases in the prices of oil, chemical fertilizers, and raw materials, placing additional inflationary pressures on the U.S. economy and consumer households.
Analysts believe that the continued upward trend in energy prices could force the Federal Reserve to maintain its tight monetary policy for a longer period, even in the face of slowing economic activity indicators.
Labor Market
Meanwhile, data from the U.S. Department of Labor shows a slight increase in weekly jobless claims. Accordingly, the number of new claims rose by 5,000 to 215,000 in the week ending May 23.
Despite this increase in U.S. unemployment insurance claims, the layoff rate remains relatively low, except in the AI-related technology sector, which has seen successive waves of layoffs in recent months. This supports the Fed's potential decision to maintain high interest rates for a longer period to curb inflation.
The U.S. Department of Labor announced that the country's labor market continues to show resilience against the economic uncertainties caused by the war against Iran and rising prices.
The U.S. unemployment rate is expected to remain steady at 4.3 percent this month, while the number of continuing unemployment insurance claims has declined compared to the high levels recorded last year.
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