Try to spin this, Joe: Inflation soars to highest level in 40 YEARS as 'Bidenflation' sees prices jump 6.8% in biggest rise since Carter admin after White House had secret meetings with journalists begging for better press on economy
December 10, 2021
6.8%?! And yet the US government does not include the cost of Gas – up over a $1.00 per gallon – and Food in their Consumer Price Index. Real (non-government data) inflation is closer to over 20%.
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via DailyMail.com:
- Overall consumer prices rose 6.8% in November from a year ago, the biggest annual gain since 1982
- Consumer price index jumped 0.8% on the month, down slightly from October's gain of 0.9%
- 'Inflation is going to get worse before it gets better,' one analyst warns as supply chain crisis continues
- Soaring inflation has become a political liability for Biden, who is urging journalists to be more favorable
- Administration officials have been holding secret briefings pleading for better coverage on the economy
The US inflation rate has hit its highest level in nearly 40 years, adding woes for consumers and compounding the issue as a political liability for President Joe Biden.
The consumer price index rose 0.8 percent last month after surging 0.9 percent in October, the Labor Department said on Friday.
It pushed annual inflation to 6.8 percent in November, the highest increase since June 1982 and well above October's 6.2 percent annual rate.
A labor shortage is boosting wages, sending costs higher for businesses, and chaos in the supply chain is showing little sign of easing, indicating that high inflation could persist well into 2022.
'With supply shortages likely to stick around until next year and service-sector prices trending higher, inflation is going to get worse before it gets better,' said Sam Bullard, a senior economist at Wells Fargo in Charlotte, North Carolina.
Biden, who has been hammered by critics over soaring inflation, responded to the latest report with a statement insisting that 'price and cost increase are slowing, although not as quickly as we’d like.'
'Half of the price increases in this report are in cars and energy costs from November. Since then, we have seen significant energy price reductions,' argued Biden, adding that strong gains in employment and consumer savings mean that 'economic growth is stronger here than virtually any other nation.'
The consumer price index rose 6.8 percent in November from a year ago, up from October's gain of 6.2 percent and the biggest annual gain since 1982.
Soaring prices are hitting Americans hard in essential categories, with groceries overall up 6.2 percent on the year in November. Steak jumped 25.6 percent, bread rose 4 percent, and fresh fruits were up 5.8 percent.
Regular unleaded gasoline soared 60.1 percent from a year ago, and new cars and truck were up 11.1 percent, while used cars rose 31.4 percent.
Excluding the volatile food and energy components, the CPI rose 0.5 percent last month after gaining 0.6 percent in October. The so-called core CPI jumped 4.9 percent on a year-on-year basis after increasing 4.6 percent in October.
Soaring inflation has become a major political liability for Biden, and earlier this week reports emerged that administration officials were conducting a blitz of off-the-record briefings to convince journalists to cover the economy more favorably.
The strategy appears to be finding traction in some quarters. On Thursday, CNBC host Jim Cramer gushed that 'we have the strongest economy perhaps I have ever seen.'
CNN host Don Lemon also literally broke into song on Tuesday, trilling 'Laaaaa!' as he crowed that gas prices had dropped five cents in the last month.
Conservative critics have hammered on inflation figures, with the Republican National Committee responding to the latest inflation data in a statement blaming Biden's multi-trillion Build Back Better agenda.
'Joe Biden and the Democrats' Build Back Broke agenda created historically high inflation, making Americans pay more for nearly everything this holiday season, said RNC Chairwoman Ronna McDaniel.
'With skyrocketing prices at a 39-year high, a supply chain crisis, trillions in reckless spending and tax hikes on families, Biden has lost the trust and confidence of the American people to get the economy working for them,' she added.
'Americans can thank Biden and the Democrats for the most expensive holiday season on record.'
Biden fired back in his statement that 'the challenge of prices underscores the importance that Congress move without delay to pass my Build Back Better plan, which lowers how much families pay for health care, prescription drugs, child care, and more.'
'For anyone who, like me, is concerned about costs facing American families, passing BBB is the most immediate and direct step we can take to deliver,' he added.
Biden said that reining in inflation was a 'a top goal of my administration.'
The latest inflation reading will only add pressure on Federal Reserve Chairman Jerome Powell to raise benchmark interest rates, following criticism that the Fed's easy money policies have sent consumer prices out of control.
The Fed has a dual mandate to maintain 'full employment' and keep inflation steady at 2 percent annually. Higher interest rates usually tame inflation, but can put a damper on hiring.
'A continued trend higher in core inflation creates further hawkish risks for a Fed that has recently become more focused on the inflation side of its mandate, and suggests a rising likelihood of an even earlier first rate hike,' said Veronica Clark, an economist at Citigroup in New York.
The new inflation report followed on the heels of news last week that the unemployment rate fell to a 21-month low of 4.2 percent in November.
Tightening labor market conditions were underscored by a report on Thursday showing new applications for unemployment benefits dropped to the lowest level in more than 52-years last week.
Other data this week showed there were 11 million job openings at the end of October and Americans quit jobs at near-record rates.
Fed Chair Jerome Powell has said the U.S. central bank should consider speeding up the winding down of its massive bond purchases at its policy meeting next Tuesday and Wednesday. Many economists are expecting an early Fed interest rate increase.
The Fed tracks the alternative personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, for its flexible 2 percent inflation target.
The core PCE price index surged 4.1 percent in the 12 months through October, the most since January 1991. November data will be released later this month.
Fueling the inflation has been a mix of factors resulting from the swift rebound from the pandemic recession: A flood of government stimulus, ultra-low rates engineered by the Fed and supply shortages at factories in the U.S and abroad.
Manufacturers have been slowed by heavier-than-expected customer demand, COVID-related shutdowns and overwhelmed ports and freight yards.
Employers, struggling with worker shortages, have also been raising pay, and many of them have boosted prices to offset their higher labor costs, thereby adding to inflation.
The result has been price spikes for goods ranging from food and used vehicles to electronics, household furnishings and rental cars.
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