CNBC reports that the personal consumption expenditures price index rose at an annual rate of 4.4 percent in September, the highest since 1991. And that’s with the soaring food and energy costs taken into account. Even without them, Western Journal reports, “year-over-year inflation hit the highest rate since May 1991 at 3.6 percent.” That “core” PCE index, which excludes energy and food, is the measure the Fed prioritizes in measuring inflation. Its yearly goal is two percent inflation.
CNBC adds that “the headline inflation rate was pushed by a 24.9% increase in energy costs and a 4.1% gain in food. Services inflation rose 6.4% on the year while goods increased 5.9%” and also notes that average personal income has declined one percent, making the price increases seem even more onerous.
Nor has the jump in inflation led to a commensurate rise in GDP. Despite the 4.4% inflation rate, GDP is only growing at a 2% rate, with the Atlanta Fed predicting that we might have slowed to 0.2% growth and could even enter a contraction soon.
Yellen had this to say about inflation: “Year-over-year inflation remains high and will for some time simply because of what’s already happened in the first months of the year. But monthly rates I believe will come down in the second half of the year. I think we’ll see a return to levels close to 2%.”
Others aren’t so optimistic. Connel Fullenkamp, a professor of the practice of economics at Duke, had this to say in a recent Newsweek article:
the Fed has seriously underestimated the scope of this problem, which goes well beyond the snarled traffic in our ports and the shortage of computer chips. Almost no part of the supply side of the American economy is equipped to respond to the unprecedented rebound in demand, and this will lead to much higher inflation for at least a few years.
The result is that many businesses now lack the extra capacity needed to meet an unexpectedly large increase in demand. It’s not that companies can’t or won’t respond to these increases, but adding capacity takes time. And after decades of not being able to raise prices at all, most companies are in no hurry to return to those days. Chances are, they’ll take their time and only invest where they are highly certain that demand will persist.
Even Jerome Powell, Chairman of the Fed, noted that inflation might be here longer than the Fed originally predicted.
Others note that in addition to being here to stay, inflation might be far higher than the Fed is saying. As Strange Sounds puts it:
- Gas is up 56% since last year.
- Used cars are up 30%.
- Laundry? 26%.
- Predators like Uber and Lyft? 11%.
- Restaurants? 4%.
- Pampers and Tampax? Going up 5–9% in September.
- But don’t worry, the Fed’s target inflation is just… wait for it… “2%.”
Furthermore, inflation might rise yet higher if consumers start spending the money that the government is pouring into the economy. ZeroHedge reports that “Data shows that 75% of the government handouts have either been saved or used to pay down debt (economically the same as saving). Only 25% have been used for consumption.” Were the trillions of freshly printed dollars spent rather than saved, prices for consumer products could skyrocket as even more dollars chase a low number of products.
The inflation situation is much the same across the Atlantic.
ZeroHedge reports that in Europe, which has experienced a similar level of growth to America, “The bigger problem is that while the growth burst is certainly transitory, the roaring inflation may not be. Because between the surge in growth and soaring oil and gas prices, Eurozone headline inflation exploded 4.1% this month, more than twice the European Central Bank’s target and matching the all-time-high for the data series launched in 1997.”
Chinese inflation, however, has stayed low. Currently, it is hovering around 0.7%.
The post BIDENFLATION: Stunning New Report Shows Inflation Just Hit A 30-Year High appeared first on Trending Politics.
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