The Labor Department reports that the Consumer Price Index rose 0.6 percent in January on a seasonally adjusted basis, driving inflation 7.5 percent over the past 12 months.
The statisticsaccording to CNBC, they indicate “a worsening of the outlook for inflation and the consolidation of the probability of substantial increases in interest rates this year”.
The 7.5 percent rise is higher than Dow Jones estimates of 7.2 percent and marks the highest reading in four decades.
Don’t worry though. The press release from the Department of Labor indicates that the skyrocketing inflation figures are mainly due to the basic necessities of life.
“Increases in the food, electricity and housing indices were the largest contributors to the increase for all seasonally adjusted items,” they report.
WASHINGTON (AP) — Inflation in the United States has soared 7.5% in the past 12 months, its biggest rise since 1982.
—Zeke Miller (@ZekeJMiller) February 10, 2022
It is imperative to keep in mind that while the inflation numbers and charts are devastating, the most devastating impact is what the American people are feeling right now because of that data.
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For Americans trying to cover basic necessities like food and energy, it’s a huge problem costing families thousands of dollars.
A published analysis in mid-December by Penn Wharton’s budget model shows the impact trying to keep pace with inflation will have on the average American family.
No matter what inflation metric you look at, it’s worrying.
Inflation (CPI) for all items is 7.5% last year, the highest since February 1982. (blue line below)
Inflation excluding food and energy was 6% last year, the highest since August 1982. (pink line below) pic.twitter.com/8piWJWWoyq
— Heather Long (@byHeatherLong) February 10, 2022
“We estimate that inflation in 2021 will require the average American household to spend about $3,500 more in 2021 to reach the same level of consumption of goods and services as in previous recent years (2019 or 2020),” the group wrote.
Worse yet, it is much more damaging to low-income households because a higher percentage of their budget will be spent on those basic needs.
“Lower-income households will have to spend about 7 percent more, while higher-income households will have to spend about 6 percent more,” they add.
Inflation ran amok in the 1970s as the price of oil skyrocketed as the US pursued massive government spending programs. Led to stagflation, gas pipelines, economic malaise as supply chains cracked
I just posted today for no reason.
— Ambassador of Truckistan Poso 🏁 (@JackPosobiec) February 10, 2022
Politically, the inflation figures are devastating for the Biden White House and the Democratic Party, in general, heading into the midterm elections.
It is, as they say, “the economy, stupid”.
The most recent real clear policy The average of all major national polls shows that President Biden’s numbers are significantly below the level of the economy.
Only 38.3 percent approve of Biden’s handling of the economy, while 56.3 percent disapprove.
— Squawk Box (@SquawkCNBC) February 10, 2022
Tommy Pigott, the RNC’s Director of Rapid Response issued a statement criticizing the president.
“Unfortunately for the American people, Biden decided to double down on the policies that caused this inflation in the first place,” Pigott said.
“Every time Biden says the word ‘prices,’ remember this: He lied about inflation for months, he lied about its consequences, and he has zero credibility on the subject.”
Biden says “long-term unchecked inflation would present a real challenge to our economy,” but adds that he is “sure that’s not what we’re seeing today.” pic.twitter.com/FDGUKGBpmc
—Bloomberg Quicktake (@Quicktake) July 19, 2021
President Biden said over the summer that inflation at the time was merely transitory, a notion these latest numbers suggest may be incorrect.
“I want to be clear: My administration understands that if we ever experience long-term runaway inflation, that would present a real challenge to our economy,” he said over the summer.
“While we are confident that is not what we are seeing today, we will remain vigilant for any response that is necessary.”
It’s a real challenge okay, Joe. He is destroying the budgets of ordinary Americans. That is a problem.
The biggest challenge, however, is trying to survive the next three years with a financially illiterate person sitting in the White House.