Secretary of the Treasury Janet Yellen told members of Congress Tuesday that she expects high inflation to persist after initially saying the increase in costs would be “transitory.”
Yellen cites COVID-19 variants, the war in Ukraine and shutdowns in China as factors in rising inflation.
“There's no question that we have huge inflation pressures that inflation is really our top economic problem at this point,” she said. “And that it's critical that we address it. So, I do expect, I do expect inflation to remain high, although I very much hope that it will be coming down now."
Yellen rejected arguments that corporate greed was causing inflation.
“I guess I see the bulk of inflation as reflecting demand and supply factors,” she said. “And, on the, on the supply side, we've had huge supply chain issues due to the pandemic and shifts in the pattern of consumption away from services and toward goods. We've had enormous increases in food and energy prices, partly reflecting Russia's war on Ukraine.”
According to the Bureau of Labor Statistics, the price of goods increased by 8.3% in the 12 months ending in April. While the inflation rate dropped slightly in April, May figures will come out later this week, which could be higher given the jump in gas prices.
Although the inflation rate is high, job numbers in the U.S. remain strong.
While inflation is raising the costs of goods, employees saw a bump in pay in May. The average nonfarm hourly rate increased by 10 cents, or .3%, to $31.95. In the last 12 months, the BLS reports that the average hourly rate for nonfarm work rose 5.2%.