Pentagon worries over record US inflation

Pentagon worries over record US inflation

Pentagon officials worry about record inflation in more than 30 years in the USA

Record inflation in the United States since 1990 causes concern among the Pentagon leadership and forces them to prepare for higher salaries and higher weapons costs, DefenseOne reports, citing former and current defense officials.

In November, the US Department of Labor reported that consumer prices in the US in annual terms in October accelerated sharply to 6.2% from 5.4% a month earlier, and only in October they jumped by 0.9%. Thus, annual inflation in the United States reached its maximum value in almost 31 years, when the indicator was 6.3% in November 1990.

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“This, of course, causes us concern right now, but … there is also some speculation in this,” the portal quotes Pentagon financial inspector Mike McCord as saying.

As the portal notes, military-industrial companies, which are already facing a crisis in the supply chain, are now warning that inflation could increase the cost of weapons under current and future contracts. At the same time, the portal notes that the increase in prices for weapons depends on many factors, and if the Pentagon has a contract with a fixed price, then the price is likely to remain the same. However, if it is a cost-sharing contract, then the Pentagon may need to pay a higher price.

According to Robert Hale, who served as the Pentagon’s auditor during Barack Obama’s presidency, higher inflation will cause contractors to pay their employees more, which means higher arms prices.

Source: BBC