US inflation at its peak

2021 saw the closing estimates of inflation at their highest from 1982, thanks to the surging demand of consumer goods by American consumers and the widespread and global supply chain distortion caused by the pandemic.


The Consumer Price Index rose by 7% in December 2021, with respect to the same month of 2020, and by 6.8% in November. The increasing trend of inflation seem to stabilize around digits that surpass 6% for the last three months of 2021.


Automobile and durable goods prices keep influencing the inflation rise, helped by the demand and offer imbalances caused by the pandemic. Another important factor which contributes to such soaring inflation is the rise of energy prices, due primarily to the pandemic disruption to the market and the geopolitical instability of the major exporting countries.


Such high inflation rate is coupled with a fall in unemployment rate and a rise of hourly wages: the Labor Department estimates that unemployment fell from 4.2% to 3.9%, close to full employment equilibrium, and that the hourly wages rose by 4.7%, with respect to the previous year, contributing to the average increase of 3% from pre-pandemic times. At the same time, the National Federation of Independent Business highlight how 49% of small business declared in December they will be raising prices in the following three months.

Holiday sales soared, with e-commerce notching huge gains

Holiday retail sales jumped 11% with respect to previous year figures, in the period from November 1st to December 24th, thanks to a renewed trust of American consumers during the holiday season, despite the huge inflation rise of prices.


Mastercard data, reported in the Mastercard Spending Pulse, registered an 8.5% increase in retail sales during the holidays, with respect to the previous years. In store sales increased by 8.1%, while e-commerce rose by 11%. With respect to 2019, orders online jumped 61%.


Over the total of sales, 20.9% of transactions was realized on online platforms, increased from the 2019 figure of 14.9%, thus showing how the pandemic has inevitably accelerated the shift towards online shopping of American consumers, especially during the holiday season.


Despite initial fears regarding deliveries and delays, most of the gifts arrived on time, thanks to the American consumers’ early ordering to avoid such occurrences.


In general, despite the long period considered in the report, Mastercard highlights how most of the transaction happened during the Thanksgiving long weekend, thanks to the convenient offers displayed on Black Friday, with a 14% increase with respect to 2020.

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