President Joe Biden prepares remarks regarding the Colonial Pipeline cyberattack and resumption of operations, Thursday, May 13, 2021, in the Oval Office of the White House. (Official White House Photo by Adam Schultz)
The overall strategy of Bidenomics seems to be, restrict the supply of the economy’s raw materials, like oil, and pump loads of money into the system for what’s left on shelves. That’s the perfect recipe for inflation, and that’s exactly what America is getting. The Wall Street Journal reports on today’s surging CPI inflation report, writing:
U.S. consumer prices continued to climb swiftly in June, as the economic recovery gained steam and demand outpaced the supply of labor and materials.
The Labor Department said last month’s consumer-price index increased 5.4% from a year ago, the highest 12-month rate since August 2008. The so-called core price index, which excludes the often-volatile categories of food and energy, rose 4.5% from a year before.
The index measures what consumers pay for goods and services, including clothes, groceries, restaurant meals, recreational activities and vehicles. It increased a seasonally adjusted 1% in June from May, the largest one-month change since June 2008. Prices for used cars and trucks leapt 10.5% from the previous month, driving one-third of the rise in the overall index, the department said. The indexes for airline fares and apparel also rose sharply in June.
Consumers are seeing prices rise for numerous reasons, as the U.S. economic recovery picks up. Richard F. Moody, chief economist at Regions Financial Corp., said the main driver of June inflation was booming demand that outpaced the ability of businesses to keep up. Another factor, he said, was the recovery in prices for air travel, hotels, rental cars, entertainment and recreation—all services hit hard by the Covid-19 pandemic.
“Demand is coming back very rapidly, and businesses are normalizing prices in the sense that they are making up for declines” earlier in the pandemic, he said.
Supply shortages and higher shipping costs also continue to drive rapid increases in goods inflation. Prices of goods, excluding food and energy, saw the two biggest monthly increases on record in April and May, Mr. Moody said.
Action Line: When inflation hits, it can be more difficult than ever to save. If you need an extra push each month to get serious, click here to subscribe for my free Survive & Thrive newsletter. But only if you’re serious.
E.J. Smith - Your Survival Guy
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