Inflation’s Troubling Comeback
Today’s inflation report release delivered bad—but not surprising—news for households. The consumer prices picked up for the second month in a row reversing inflation’s downward trend.
Rising global energy prices are the big driver of last month’s price increases which makes driving and transporting goods more expensive. However, proposed regulatory changes from the Biden administration could also add new labor costs that will in turn drive consumer prices higher.
According to the Bureau of Labor Statistics, prices on all goods rose 0.6% from July to August—a 14-month high—and 3.7% year-over-year. In the previous month, inflation rose 0.2% from July and 3.2% year-over-year, which marked a turnaround from cooling inflation that had been decelerating since June 2022 when headline inflation topped 9.1%.
While the biggest driver of July’s inflation pickup was increased rent prices and housing costs, energy costs drove August inflation higher. The national average for a gallon of gas is $3.85, according to AAA, up from $3.60 the month prior. The energy index rose 5.6% in August but fell 3.6% over the past 12 months and gasoline decreased 3.3% over the last 12 months. We expect that if energy prices keep rising this month, that will be reflected in next month’s numbers.
Taken together, we have a dismal picture of inflation. The prices of goods that Americans are buying every day are two to three times higher than they were in 2021. So despite the headline CPI appearing to be lower than this time one year ago, Americans don’t feel relief.
…
President Biden’s woeful marks on measures like handling inflation and the economy reflect that Americans don’t trust him to fix the problems he created. [keep reading]
|
|
