By Doug Young – 06 October 2023

inflation accelerates


The American economy is facing a growing concern as inflation continues to surge, raising fears of an impending economic downturn.

The recent acceleration of inflation, hitting new heights in August, has raised further questions about the stability of the economy.

Inflation Hits New Highs

According to the Consumer Price Index (CPI), which measures everyday goods such as gasoline, groceries, and rents, inflation soared in August, marking the steepest monthly rise this year.

Compared to the previous month, inflation climbed 3.7 percent year over year, intensifying worries about the impact on consumers’ purchasing power.

Core Inflation on the Rise

Not only headline inflation, but core inflation, which includes food and energy, also rose significantly.

This increase highlights the intractable nature of inflation, with prices remaining more than two times higher than pre-pandemic levels.

Such persistent inflationary pressures may force the Federal Reserve (FED) to consider raising interest rates once again in the fourth quarter.

Potential Impact on Interest Rates

The possibility of interest rate hikes by the FED arises from concerns about the macroeconomy and the need for tighter monetary policy.

While the exact consequences of increased inflation on the overall economy remain uncertain, experts emphasize the importance of closely monitoring interest rate decisions as they can have far-reaching implications for businesses and consumers alike.

Struggles for Individuals and Households

Individuals and U.S. households are feeling the pinch as rising inflation erodes their purchasing power.

Household income has faced a decline for the third consecutive year, leaving individuals with fewer savings to cope with the rising prices. Moreover, total household debt has reached a staggering $17 trillion in the second quarter of 2023.

The alarming increase in credit card debt, which now exceeds one trillion dollars, adds to the financial burden faced by many Americans. As a result, the supplemental poverty measure, which considers participation in government programs, has seen a significant increase from 5.2 percent in 2021 to 13.4 percent in 2022.

Expert Warnings and Doubts

Prominent figures in the financial sector, such as JPMorgan CEO Jamie Dimon, have voiced concerns about the U.S. economy. Dimon warns against assuming a strong consumer base and a booming environment in the years to come.

He cites stubborn core inflation, ongoing geopolitical tensions, and high interest rates as significant headwinds to the U.S. economy.

Dimon has previously expressed doubts about the FED’s ability to orchestrate a soft landing for the economy, raising concerns about potential disruptions in the coming year.


The rising inflationary pressures in the U.S. economy have sparked concerns about an impending economic downturn.

As inflation continues to accelerate, experts emphasize the need for preparedness and awareness among businesses and individuals alike.

Monitoring interest rate decisions, managing debt, and adapting to changing economic conditions will be crucial in navigating the challenges posed by rising inflation.

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