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AOC skeptical about inflation: Price increases are 'sector specific' and could be due to 'supply-chain issues'

By Weston Blasi

Alexandria Ocasio-Cortez isn't sure inflation is the root cause of recent price spikes in the U.S.

Rep. Alexandria Ocasio-Cortez, who represents portions of the Bronx and Queens in Congress, isn't sure whether the price increases U.S. consumers have been experiencing are entirely aligned with broader inflation concerns (link).

"When you look at what actual prices are going up, it's in very specific sectors," Ocasio-Cortez, widely identified as "AOC," said during an interview with CNN (link) on Monday. And circumscribed price moves, to the New York Democrat, do not scream "inflation":

Prices for various U.S. goods have increased recently, such as cars (link), meat (link), lumber, housing (link) and gas (link).

See also:Eggs and pancakes for dinner: How one family of seven is coping with America's food inflation (link)

"But we know it's getting expensive," the second-term House member continued. "Things like the cost of lumber, items like cars, whether they are new or used and other sorts of items that rely on shipping and shipping containers coming in from overseas. These are very sector specific, which means that these are due to supply-chain issues."

The COVID-19 pandemic has wreaked havoc on supply chains (link) across the country and beyond. Industries including retail (link), agriculture (link) and housing (link) have been impacted by supply-chain disruptions related to the pandemic.

As Ocasio-Cortez noted, lumber prices have been on the rise. Prices were at record highs this year before stabilizing in recent months (link) -- the cost of lumber (link) had surged more than 300% between April 2020 and May 2021.

Used-vehicle prices soared (link) by 10.5% in June from a year before, following gains of 7.3% in May and 10% in April. The June rise represented the biggest increase since 1953 (link).

Partially due to concerns over the delta variant (link)and inflation, U.S. markets tumbled on Monday (link). The Dow Jones Industrial Average fell 725.81 points, or 2.1%, to close at 33,962.04, its biggest one-day percentage and point drop since Oct. 28, 2020. The S&P 500 dropped 68.67 points, or 1.6%, to end at 4,258.49, while the Nasdaq Composite shed 152.25 points, or 1.1%, finishing at 14,274.98 -- the worst day for both indexes since May 12.

Stocks rebounded sharply (link) on Tuesday, recapturing the bulk of day-earlier losses.

Jerome Powell, chairman of the Federal Reserve, has stated that pandemic-related shortages and bottlenecks are behind recent price spikes. He has predicted inflation will ease as the U.S. economy continues to reopen (link).

"Inflation has increased notably and will likely remain elevated in coming months before moderating," Powell said on July 14.

Key Words (July 2020):Watch Ocasio-Cortez demolish Florida Republican who called her 'disgusting' -- and some other choice words (link)

-Weston Blasi; 415-439-6400; AskNewswires@dowjones.com

 

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07-23-21 0936ET

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