U.S. Inflation Is Nonetheless Climbing Quickly

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Central bankers hope their policies will dampen economic growth without spiking unemployment or throwing America into recession – what they often call a “soft landing.”

“I really want us to have that as a result, but I know it’s not going to be easy,” Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, said in an interview Monday.

Officials have flatly acknowledged that the economy will be difficult to shut down smoothly, and some have suggested they would be prepared to inflict economic pain if it were necessary to combat high inflation.

If the economy gets to a point where unemployment starts to rise but inflation remains “unacceptably high,” price hikes “will be the threat we have to face.”

A challenge for policymakers – and even more so for families – is that price increases essentially show up. Grocery costs rose 0.9 percent mom in April, the 17th straight monthly increase, Wednesday’s report showed.

The rise was driven by dairy products, soft drinks and a 10.3 percent monthly increase in egg prices as bird flu decimated poultry flocks. Such inflation tends to hit the poor hardest, who spend more of their budgets on necessities like food and gas.

But as Americans see strong job and wage growth — if not strong enough to fully counteract inflation — many are managing to shoulder rising costs and keeping aggregate demand strong for now.

“Consumers seem poised to accept the higher menu prices, especially as inflation is rife,” George Holm, chief executive officer of grocer and restaurant supplier Performance Food Group, said in a conference call on Wednesday. “Nonetheless, this will need to be closely monitored over the coming months and quarters.”

Ana Swanson contributed to the coverage.