Energy Crisis Threatens Return Of 1970s Inflation

Energy Crisis Threatens Return Of 1970s Inflation

A customer shops for groceries at a Miami supermarket as rising consumer prices make many think of ... [+] similarities with 1973 (Photo by Joe Raedle/Getty Images) The growing energy crisis is causing rising prices for groceries, cars, rent, and just about everything else. Americans have been here before — in the 1970s when oil shocks and soaring inflation defined the economy. Is America on a similar course today? It can't be ruled out. While there are critical differences between the U. S. economy then and now, the inflation numbers speak for themselves, and Fed officials are no longer blindly assuming that rising prices are "transitory" and will reverse once Covid-related supply chain issues are fixed. U. S. consumer prices increased solidly again in September, putting pressure on the Biden administration to urgently resolve strained supply chains, hampering economic growth. In the 12 months through September, the Consumer Price Index (CPI) increased 5. 4% after advancing 5. 3% on a year-on-year basis in August. And that rate will move higher in the coming months as the recent energy price spike is factored in. Overall, inflation averaged 7. 1% during the 1970s, although it hit double-digit levels in 1974 and 1979.