LONDON- US consumer prices are rising at the fastest rate for several years, as the economy recovers from the coronavirus recession and manufacturing supply chains struggle to keep up with demand.
But the rate of inflation is still being flattered by the relatively modest increase in energy prices, masking the impact of faster increases in food products and other commodities.
If energy prices rise further in the second half of 2021 and into 2022, as the expansion matures, inflation could prove more persistent than anticipated by officials at the Federal Reserve.
The US consumer price index has increased at a compound annual rate of 2.55 percent over the last two years, the fastest for more than eight years, according to data from the US Bureau of Labor Statistics.
But energy prices have risen at an average rate of only 2.20 percent over the same period, which uses 2019 rather than 2020 as a baseline to avoid distorted comparisons caused by the first wave of the epidemic last year.
Prices for non-energy items have increased at a rate of 2.59 percent, the fastest for more than 12 years since the financial crisis of 2008/09.
Inflation has accelerated most sharply in the goods sector, where manufacturers have struggled to meet the surge in demand, especially for motor vehicles and consumer electronics.
As a result, prices for merchandise other than food and energy are increasing at the fastest rate since the early 1990s.
US central bank officials have said they believe the acceleration will prove temporary, with price increases slowing in 2022 and 2023.
But inflationary pressures normally intensify as a business cycle becomes longer and more capacity constraints emerge.
