Bidenflation Much Worse Than Expected
Consumer Prices Rise 9.1%
Inflation in the United States, already at 40 year highs, rose to an annual rate of 9.1 percent in June, the Department of Labor said Wednesday. This is the highest rate since 1981.
Compared with a month earlier, the Bureau of Labor Statistics’ Consumer Price Index was up 1.3 percent.
Economists had expected CPI to rise at an annual rate of 8.8 percent, up from 8.6 percent in May. They expected a month-over-month increase of 1.1 percent.
Inflation has American families hard by raising prices for everyday necessities like food, gasoline, housing, transportation, and utilities. Huge increases in the price of gasoline in June, which hit new all-time highs several times during the month, started to sap household and business spending on other items.
Economists look to a sub-category of inflation that excludes food and fuel prices as a better guide to future inflation than the headline number. This was up 5.9 percent in June compared with 12 months earlier. For the month it rose 0.7 percent. Both were higher rates of inflation than expected.
This was the 13th straight month of inflation running higher than five percent, meaning this year’s price increases are building on top of the decades high increases of last year.
Grocery store prices were up 12.2 percent annually and one percent for the month. Energy prices are up 41.6 percent annually and 7.5 percent since May. Gasoline prices jumped 11.2 percent in June compared with May, for a 59.9 percent year-over-year increase.
There had been some hope that inflation would let up in apparel, as some big retailers have said they were discounting to clear inventory. Prices of clothing rose 0.8 percent in the month, up 5,2 percent compared with a year ago.
Although many economists and anti-Trump journalists claimed President Donald Trump’s tariffs would raise prices, consumer prices remained low throughout his administration. Trump’s tariffs turned out not to be taxes on consumers. Instead, they were absorbed by Chinese producers and exporters and the profit margins of most large U.S. companies.
Inflation only began to accelerate last March after years in which it typically came in below the Fed’s two percent target. The Fed had decided to keep interest rates low in 2021 although the economy was recovering at a faster than expected rate. What’s more, the Biden administration pushed through billions of dollars of deficit spending in the American Rescue Plan….
Header featured image (edited) credit: Biden/Kevin Dietsch/Getty Images
Emmphasis added by (TLB) editors
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