Inflation in the United States: Recent Developments and Outlook

15 Pages Posted: 6 Oct 2021

Date Written: September 30, 2021


Global inflation rates have increased since early 2021, especially in the United States, where there has been an upward surprise in recent months. Part of the US inflation increase is due to a statistical phenomenon stemming from the comparison of current and previous-year prices, which were marked by an across-the-board decline in activity. Further, the economic recovery has prompted a rise in prices in the sectors most affected by the pandemic, it has accentuated certain supply and logistics disruptions, and it has been accompanied by an increase in the price of the energy component. While these factors are considered to be transitory, three upside risks to prices may be identified: first, wage pressures arising from the labour supply and demand mismatch; second, a greater-than-expected inflationary effect of the fiscal stimulus introduced in response to the pandemic; and third, a possible de-anchoring of medium-term inflation expectations. In any event, these transitory effects are expected to feed through relatively moderately to euro area inflation.

Keywords: COVID-19, inflation, inflation expectations

Suggested Citation

Borrallo, Fructuoso and Buesa, Alejandro and Párraga Rodríguez, Susana, Inflation in the United States: Recent Developments and Outlook (September 30, 2021). Banco de Espana Article 34/21, Available at SSRN:

Fructuoso Borrallo (Contact Author)

Banco de España ( email )

Alcala 50
Madrid 28014

Susana Párraga Rodríguez

Banco de España ( email )

Calle Alcala, 48
Madrid, 28014

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