The prices of consumer items increased by nearly 1 percent last month and spiked to 6.2 percent overall in the month of October from the same time a year ago according to new data released today.
As we approach the season of thankfulness, higher prices across the board are no reason to be grateful. These inflation numbers are a troubling sign of the financial hardships families endure to provide their most basic needs of food, shelter, and energy.
By the numbers
According to today’s the Bureau of Labor Statistics data:
- Inflation increased 0.9 percent from September to October, nearly double the 0.6 percent increase the month prior
- Inflation increased 6.2 percent from October of 2020 to October 2021
- The leading areas of inflation were energy, shelter, food, and used and new cars
- Gas prices were up 49.6 percent from a year ago
- Food prices were up 1 percent last month and 5.3 percent from a year ago
- Costs for shelter rose 3.5 percent from a year ago
- Real wages (wages minus inflation) fell by 0.5 percent from last year
Americans are hurting and Washington doesn’t have a good answer
Inflation is a top concern for Americans along with the coronavirus according to recent CNBC polling. President Biden’s approval ratings are tanking, especially as pertains to his handling of the economy, in significant part because of inflation.
The president not only has no answer nor a plan of action, but he continues to shrug off economists (including those who served in previous Democratic administrations) that his massive federal spending efforts earlier this year are to blame.
As the New York Times reports, during a recent CNN town hall, President Biden conceded this, saying, “I don’t have a near-term answer” for bringing down gas prices,… “I don’t see anything that’s going to happen in the meantime that’s going to significantly reduce gas prices.”
Also, Treasury Secretary Janet Yellen, who previously claimed that inflation was “transitory” or temporary, is changing her tune. She projects that improvements in the overall inflation rate won’t come until “the middle to end of next year, second half of next year.”
Instead, the administration is pushing for another multi-trillion-dollar federal spending bill that is certain to drive prices even higher. Economists at the Federal Reserve of San Francisco recently confirmed that Biden’s $1.9 trillion American Rescue Plan, which flooded most households with stimulus checks and increased benefits, is driving the inflation rate higher.
Even Obama-era economic advisors such as former Treasury Secretary Larry Summers and White House Council of Advisers Chairman Jason Furman agree that excessive federal spending would drive prices higher and hurt the economy.
Summers warned soon after the bill was passed earlier this year that “there is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation.” He was right.
“The original sin was an oversized American Rescue Plan. It contributed to both higher output but also higher prices,” according to Furman.
Sadly, President Biden keeps on “sinning” while the American people pay the price.
The way forward is not more Washington spending
Late last week, Congress approved a $1.2 trillion infrastructure spending bill that serves as a downpayment for Biden’s nearly $2 trillion Build Back Better plan full of reckless federal spending that creates costly new entitlements that will discourage work.
Washington is on a partisan path to spend as much as possible with no regard for the economic woes it triggers. Americans are beginning to connect the dots.