Much of the media is still carrying water for the Biden administration by insisting that everything is just fine. Meanwhile, anyone who has shopped for groceries knows that inflation is killing the economy.
The core personal consumption expenditures price index, the Federal Reserve’s preferred inflation measure, accelerated last month by the most on an annual basis in 30 years.
Core PCE, which excludes food and energy, rose 3.6% year over year in July, according to the Bureau of Economic Analysis, the most since 1991. Last month’s reading was revised up to 3.6% growth from 3.5%.
Prices rose 0.3% on a monthly basis as the pace of gains declined for a second straight month. Prices increased 0.5% in June and 0.6% in May.
So it’s time for more happy talk.
Federal Reserve Chairman Jerome Powell has said the recent rise in prices is “transitory” and that the gains will dissipate once the supply-chain issues are resolved. However, he could not say when pricing pressures might lessen.
This isn’t a supply chain issue. And it’s getting worse.
The Office of Management and Budget said it expects consumer prices will rise 4.8% in the fourth quarter from a year earlier, up sharply from the 2% rise that the Biden administration forecast in May
And the happy talk isn’t holding up.
Federal Reserve Chairman Jerome Powell’s conviction that the inflation winds whipping through the U.S. economy this year soon will subside is not universally shared.
In fact, a growing contingent within the Fed’s virtual halls is raising concern that the supply chain disruptions, burgeoning demand and shortages of labor and supplies could push the current trend well into 2022 and beyond.
Or, let’s just say 2024.
That’s not what Mike Kucharski, the owner of Summit, Illinois-based JKC Trucking, is seeing in his daily business encounters.
Instead, he is witnessing escalating freight rates caused by lowered capacity, rising demand and sharply higher energy prices. Shortages of food ingredients — he cited gluten for bread as one example — along with other raw materials also are driving inflation.
That’s not what Mike Kucharski, the owner of Summit, Illinois-based JKC Trucking, is seeing in his daily business encounters.
Instead, he is witnessing escalating freight rates caused by lowered capacity, rising demand and sharply higher energy prices. Shortages of food ingredients — he cited gluten for bread as one example — along with other raw materials also are driving inflation.
Biden begging OPEC didn’t help much. Neither will a revived Iran. The only positive sign is that courts have delivered a setback to Biden’s attempts at crippling domestic energy production.
But that won’t be enough to turn this around.
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