The uncontrollable rise in fuel prices, combined with the increase in the cost of bare essentials, has begun to have a significant impact on American households. While some states have already started sending stimulus cheques to offset price increases, others consider how to do so. However, analysts believe that a federal stimulus check, similar to the Economic Impact Payment, would be beneficial at this point.
Inflation is still high, with prices on average 8.5 percent higher than the previous year. The primary source of this high inflation rate, which is the greatest since the early 1980s, is rising fuel prices.
The fuel index increased by 18.3 percent in March alone, accounting for 50 percent of the increase in household goods.
The increase in fuel prices led businesses to pass it on to their customers. However, not all items are affected in the same way. When food, other commodities, and energy were excluded from the average, the consumer index fell by 0.4 percent last month.
Shortages of goods are driving up prices, bolstering the need for a stimulus package.
In reaction to the high pace of inflation, the Fed Reserve has stated that interest rates will be raised.
Experts are concerned that, even though prices have increased to historical levels, this moment differs from other periods of inflation in the United States. The underlying causes, according to them, are a lack of supply of goods, particularly essentials, and high fuel prices.
The collapse of global supply chains has resulted in a surge in demand that has surpassed supply, causing prices to skyrocket. This has increased the demand for another government stimulus check. Another cycle of inflation could come as a result of this.
The supply chain interruption was expected, but it became more widespread than anticipated. The Nobel Laureate economist Joseph Stiglitz says that raising interest rates by the Federal Reserve would be a short-sighted action that would harm low-income people.