After reaching historic peaks, the US inflation rate shows its first signs of improvement. In fact, at least that’s what some of the country’s leading economists say. However, what to expect from the current US inflation rate?

Read this article and understand why inflation is so high, the trends for the coming months, and how you can make the best of this scenario.

In fact, the world is still reeling from the greatest global health calamity of the century to date. Thus, it is not surprising that the consequences of this fact extend even after the end of the pandemic.

Especially as the coronavirus pandemic has had direct consequences on the production and marketing of goods and services.

So, with factories stopped, stores closed and people locked in their homes, consumer goods began to run out of shelves.

As a self-regulatory effect, prices soared, starting a state of inflation far above the healthy threshold for a country’s economy. Thus, in 2021, the inflation rate in the United States of America rose by 7%, the highest value in the last 40 years.

In addition, another recent fact contributed to an even greater rise in inflation rates. Experts point out that the current state of tension between Russia and Ukraine contributes to rising prices, especially for gas and its derivatives.

Russia is one of the world’s leading gas producers. Thus, their involvement in an armed conflict generates uncertainty in the market regarding the availability of this good, which contributes to the appreciation of the commodity.

According to the US Bureau of Labor Statistics, the most recent increases were 0.3% in April and 1.2% in March.

Airline tickets (19% growth in the last month, 35% in the quarter), food (1% from March to April, 11% in one year) and new vehicles are the goods and services most affected.

However, there are indications of possible improvement in the future. Indeed, the current US inflation rate shows signs of slowing down.

In this way, some economists indicate that, perhaps, we are close to the peak of this “inflationary mountain” and that, in the future, this index will decrease.

According to Labor Department data, the current US inflation rate for April was 8.3%, down 0.2% from March. However, this slight drop may mean a “breath” for the consumer, who can dream of a lower tariff in the near future.

In fact, there is a reason for this drop. According to the report, this slight “stumble” in inflation was mainly driven by the reduction in the price of electricity. Americans saw a 2.7% reduction in their energy bill in April.

In fact, this impact may seem small, but it is considerable after the 11% increase in March this year. Other inputs and goods that registered price declines in recent months were gasoline (6.1%), used vehicles (0.8%), and clothing (0.4%).

Although the price of gasoline has risen in the last month, experts indicate that there is a limit and the value of this good has not suddenly “exploded”.

However, the situation will likely be fully resolved only when supply chain issues and labor shortages are overcome.

In fact, the main effects of the increase in the inflation rate in the United States are already known. Manufacturers mainly suffer from the increase in production inputs, which increases the cost of the final product/service.

This difference is, therefore, passed on to the stores/service providers. Finally, the increase reaches customers in the form of price adjustments. If you have an investment portfolio, you will also feel the effects of rising inflation.

In fact, one of the main effects is the reduction of real profit. That’s because your percentage of earnings on stocks can only be considered profit after subtracting inflation.

So the higher the inflation, the lower the real return on your stocks, as you would need higher returns to buy more goods as all prices go up. Unfortunately, there is no escape. However, it is very important to know what to do at times like this.

While the US inflation rate remains above economically healthy standards (2% rate), you need to protect your money. How to do this? Put the following tips into practice and learn how to manage your finances in unfavorable scenarios:

This advice can help you live more safely in times of high inflation. However, the best way to do this is to have a well-planned and managed financial life at all times.

If you are taking your first steps into the world of money, here are some essential tips. Click on the link below and check it out!