Inflation in United States down in September


Inflation numbers in the United States for the month of September have shown signs of stabilization, as higher inflation numbers from the summer have begun to slow down. This is good news for politicians arguing in favor of further stimulus packages for individuals, as a main neo-classical argument against stimulus packages during recessions is that this can have costly inflationary consequences.


The economic crisis provoked by the COVID-19 pandemic has been unlike recessions seen in years past, as this time, it has been a devastating demand shock that has caused millions to lose their jobs, instead of the other way around.


Despite the White House’s reticence to include another round of $1,200 checks in future stimulus discussions, the lack of elevated inflation figures may be showing us that the past stimulus package did not end up having a negative monetary effect, but rather provided a much needed boost to consumer spending and helped keep businesses throughout the country afloat.

Nowhere is this new stimulus needed more than in Puerto Rico. Even though some sectors have been outperforming 2019’s numbers, further stimulus will be needed in order to keep the local economy afloat, especially in the face of increasing COVID-19 infections.


The Reuters report went on to state that there are two price categories that have seen a significant increase: used cars and food outside the home. The latest available consumer price index for Puerto Rico showed no change in prices for these two categories in the month of August. This could be reflective of lower demand for these goods in Puerto Rico compared with the United States. September’s consumer price index release should shed some more light on this.

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