We had to destroy the economy to save the economy.
Inflation plowed ahead at its fastest 12-month pace in nearly 40 years during December, according to a closely watched gauge the Labor Department released Wednesday.
Inflation has been eating into otherwise strong wage gains for workers. However, real average hourly earnings posted a small 0.1% increase for the month, as the 0.6% total gain outweighed the 0.5% CPI headline increase. On a year-over-year basis, real earnings declined 2.4%, according to BLS calculations.
The news isn’t looking good.
Though many economists anticipate inflation to moderate to around 3% over the course of 2022, consumers are likely months away from a meaningful respite, especially as the omicron variant of the coronavirus worsens labor shortages and prevents goods from reaching store shelves.
Shelter costs, which were already one of the largest contributors to December’s gain, are expected to accelerate this year, offering an enduring tailwind to inflation. Other gauges of home prices and rents surged last year, but the full extent of those increases has yet to be reflected in the government’s measure.
People are picking up on it and they’re not happy.
Outside a Costco, Laura Godinez lifts meat, toothpaste, coffee, bottled water and bulk supplies of DayQuil from her cart — just the staples in a pandemic-era weekly shopping trip that is now often missing extras that might bust the family budget, like cookies and snacks.
Beside her truck, which used to cost $100 to fill but now takes $145 to top off, the 30-year-old construction worker feels exasperated as she assesses a $300 grocery bill that shoots up to $400 when she adds vegetables.
“I don’t want to say this, but when Donald Trump was here, it was nothing like this,” said Godinez, who said she used to lean Republican but has supported Democrats in recent years. “I’ve been worried, because instead of things getting better, it is getting worse every time. … I don’t know if it’s the President, or what happened, but (under Trump) it was so much better.”
More than 2,500 miles east, and in a different political universe, President Joe Biden’s top economic aides were blitzing news shows Wednesday, arguing that the day’s release of the worst inflation figures in 39 years actually contained glimmers of progress.
Yes. The idiot is claiming victory.
An official White House press release claims that the numbers show “that we are making progress in slowing the rate of price increases” and tells Americans that they’re “fortunate that we have one of the fastest growing economies—thanks in part to the American Rescue Plan—which enables us to address price increases and maintain strong, sustainable economic growth.”
Right now everyone in the media except Jennifer Rubin is cringing.