by CAROLINE DOWNEY title via Instapundit
The Consumer Price Index, the major inflation metric, surged by 5.4 percent on the year through June, representing the largest year-over-year increase since 2008, according to data released Tuesday by the Department of Labor.
The jump exceeded many financial firms’ and economists’ predictions. For example, economists at Goldman Sachs expected only a 5.1 percent increase from the prior year, up from 5 percent the prior month.
The increase was largely driven by price hikes in the used car and truck market, accounting for over a third of the increase, the Labor Department said. Federal Reserve and elected officials have expected inflation to moderate as the supply and demand disequilibriums in the average consumer basket rectify now that the pandemic is dwindling. They’ve suggested that production bottlenecks and supply squeezes are largely to blame for the upticks, which they claim will resolve over time rather than contribute to sustained inflation.
A large component in the inflation equation that the Fed can’t control as easily is inflation expectations, or what people think the direction of prices will be. Near-term consumer inflation expectations have risen recently according to a Federal Reserve Bank of New York survey. Year-ahead inflation expectations jumped 0.8 points to a new high of 4.8 percent in June, but inflation expectations over the next three years stayed relatively constant at 3.6 percent. One interpretation of that data is that American households are increasingly sensitive to inflation movements in the short term but not necessarily the medium to long term.
Exceeding economist expectations, the CPI rose 0.9 percent from May to June, faster than the 0.6 percent month-over-month increase the previous month. But even with food and energy costs removed from the commodity bundle, given that they’re subject to more dramatic fluctuations, the CPI still increased 0.9 percent over the month, up from 0.7 percent the previous month.
The cues from some Fed officials have been mixed and somewhat ambiguous. “It’s still too early to tell how things are going to evolve,” John C. Williams, the president of the Federal Reserve Bank of New York, said to reporters Monday. “We’ll just have to watch it carefully.”
When asked about the future of the Fed’s gargantuan asset purchase monetary policy, once referred to as “quantitative easing” after the 2008 financial crisis, William said: “The last few months, and I guess the last three months, we’ve seen some pretty strong movements, and kind of crosscurrents, both in the employment data and the inflation data.”
If inflation persists but wages do not move in lockstep with it, an effective tax will be imposed on the consumer, reducing the length a dollar can be stretched to pay for goods and services.
Democrats bring nothing but disaster. Even the 2008 recession was a product of Democrat policies and then Obama, ignorant of anything economic, only knowledgeable about raising taxes, watched a lethargic economy recover more slowly than ever before in history.
It was actually easy for Trump to invigorate and grow an economy just waiting to explode, but he did it so that it would last. The only thing that could hurt it is Democrats and this they set out to do as soon as they got the power.
Idiot Biden and his puppeteers cannot allow the economy to grow naturally; the benefits are too widespread and general. They have to control who gets the benefits; their donors and those they wish to pander to for votes.
So, welcome back, inflation. Wonderful that Democrats showed you the way back.
Were you not told over and over again that stimulating the hell out of an already-recovered economy with huge tax cuts while simultaneously suppressing interest rates would inevitably lead to a surge of inflation? Yes, you were.
Never a clue for you. Just how did Trump control interest rates? Good of you to admit the economy did well under Trump. Something NYT’s Krugman said would not be the case. Nor did HRC who said Trump would be terrible for the economy. They were wrong.
So the cure according to Biden and you is to spend spend spend or should I say print print print.
How does killing thousands of private sector jobs by EO as Biden did help the economy? The former Keystone pipeline workers would like to know.
Didn’t you follow the news? Trump constantly pressured the Fed to hold the overnight borrowing rate at the emergency stimulus level it had adopted in response to the 2007-2008 economic crash. In fact, he pressured them to lower the rate EVEN FURTHER. He simultaneously promoted fiscally irrational tax cuts, which immediately reversed Obama’s declining post-recession deficits and resulted in more debt being added over Trump’s four year term than any other time in U.S. history.
Trump’s crack-brained scheme predictably created an unsustainable boom, which facilitated yet another high-end cash grab. The richest got MUCH MUCH richer. It also left his successor with few effective stimulus tools to deal with the next downturn. Anything Biden does will involve increased inflation.
And you want this clown back?
And how did Trump “pressure” the Fed? Were they afraid he’d Tweet about the? Explain the power he has over the Fed.
Republicans reduced Obama’s deficits, not him. Remember?
As usual, you are wrong about everything, but that’s what keeps you voting Democrat.
Trump had no actual mechanism to set interest rates. A president doesn’t. He can fuss all he wants but it doesn’t mean the rates will change. You gave no answer contrary to that fact.
With the improving economy under Trump tax receipts were on the rise under Trump but unexpected covid related spending certainly didn’t help the debt. Since Biden took over gas prices are on the rise which affects everything downstream. This didn’t have to happen but Biden is trying to kill off domestic fossil fuel production while asking Russia and the Saudi’s to pump more. Stupid. Just stupid.
Rising gas prices are a tax increase on the poor and middle class. Now on top of this Biden just want to tax and spend more. Yeah I’ll take Trump back.
When “following the science” led to shutting down the economy (we know better now) it was necessary to provide aid to those put out of work, not due to economic reasons, but because of China’s virus. However, Democrats held up necessary aid to add trillions in pork, much of which goes directly into their pockets.
The economy was NOT recovered, it was weak and lethargic. There was no inflation until Democrats went on their $6 trillion spending spree of waste.
Sorry, buckaroo, this is an all Democrat show and it’s all their fault.
75 consecutive months of economic growth was a RECOVERY BY DEFINITION. At that point we should have left matters to the natural workings of the marketplace. INSTEAD, Trump stimulated the hell out of the economy utilizing emergency measures that should be reserved for dealing with a serious economic downturn.
The cost of the resulting binge was the instant reversal of shrinking annual federal deficits, trillions more piled onto the national debt, and a seriously diminished set of tools available to deal with the adverse consequences.
This was another epic high-end cash grab, brought to you again by the GOP. Once more they’re pointing their fingers, as everyone knew they would, and their base is swallowing the same old b.s. hook, line, and sinker. It’s not really all that complicated.
Anybody with a brain should be able to figure the scam out. It’s not like we haven’t seen the show before. But some people haven’t even figured out Trump, after four long years of observing Trump.
Less than 1% might be “growth”, but it’s not growth. Also, wages rose the slowest in decades. Obama’s economy was an embarrassing failure and it should be equally embarrassing to pretend to tout it as a boom time.
His economy created jobs… low paying, part time jobs. This was why they started pushing for $15 minimum wage, which usually only applied to high school and college students, because ALL the jobs they were creating were low paying minimum wage jobs.
All Trump basically did was strip away all the stupid, onerous, suppressive regulations the moron Obama imposed on business, as if he wasn’t satisfied with how much business had moved overseas or gone bankrupt and wanted to run off even more.
Trump may be a financial genius, but it didn’t take a genius to do better than Obama and idiot Biden is currently proving that it takes monumental stupidity to drag Trump’s economy down.
Most of the debt has been added by the Democrats. They would go along with no spending unless they could load it up with their dose of corruptible pork.
Democrats are disastrous. It was true under Obama and it is even worse with THIS idiot as Puppet in Chief. Democrats hate this nation, they hate the Constitution and they hate US citizens.
And now the projections of inflation are even higher than before. Totally incompetent regime. Total idiot fraud *president.
*a stain on the Oval Office and White House due to election fraud.
Spending needs to be cut to reduce debt but Democrats just waste, waste, waste, waste. Here an additional $600 million is required to use the National Guard as props for idiot Biden’s “insurrection” myth.
https://www.washingtontimes.com/news/2021/jul/12/senate-republicans-propose-600-million-bill-reimbu/
Biden Gang Now Pushing for ‘Billionaire’s Tax’ Which In Reality Will Likely Soon Tax Americans’ 401Ks and IRAs
Inflation is the highest it has been in decades. Gas prices are a key indicator of run away inflation.
Largest Spending Bill in American History is a ‘Tax Cut’ according to our glorious leader, here he is yelling… How sick is this?
Used Vehicle Prices Hyperinflate as Inflation Begins to Spiral out of Control All Over America
Someone(Corporal Cueball) back in 1992 said, “It’s the economy, stupid!”
Clyburn, the civil rights icon who cares so much about equality that he was most responsible for getting a known racist installing in office, simply says “It’s a tough time to be president*.” Yeah, especially when that groping, raping, farting, lying, corrupt idiot playing the part of President is and incompetent buffoon that placed a team of incompetents in his regime. This stupid bitch Granholm tries to dodge her responsibility and failure by assuming the American public it totally stupid. She tries to explain away her and idiot Biden’s ineptitude by excusing high prices with the fact that oil is a global produce. While true, it is also true that the Unite States is part of the globe and when we produce, we increase global supply which reduces prices. I guess no one is supposed to figure that out.
*especially if you aren’t one