Originally posted by: Charles Higgins
The Bureau of Labor Statistics ( BLS, the US govt. entity that traditionally reports CPI and inflation stats) reported a 4% annualized inflation rate ending May 2023 ( latest currently available; June stats aren't out until next week as Tom commented).
https://www.cnbc.com/2023/06/13/heres-the-inflation-breakdown-for-may-2023-in-one-chart.html
A perusal of the core categories of year over year consumer price changes in the above linked report support the fact that overall consumer prices have increased 10 - 20 % since Biden has been in office. Those aren't my cherry -picked stats..those are from the US government. The pandemic - related govt spending response ( both from the necessary and unnecessary categories; we can debate those until infinity and/or until the cows come home) was and continues to be a driving force behind inflation trends. The populace somewhat went nuts during and after the pandemic in their spending habits..pent-up demand and its aftermath, etc. Current consumer credit card debt for US consumers is just shy of a trillion dollars ( record high, of course) and credit card interest rates in general are the highest in history; savings have been dipped into and/or depleted for many in those categories as well. The most recent stats indicate that at least those in the low and middle class categories are spending less in the past couple months based on credit card spending numbers. Evidently a few people are finally saying no to profligate spending at home.
One spending category that has declined significantly is gas prices at the pump; the year-over-year comparison( May 2022 vs May 2023) shows an average 20% reduction in retail gas pricing for consumers. That's effectually a big deal and is likely a major factor affecting the current decrease in some of the overall reported inflationary metrics. Food prices at the grocery store continue to escalate generally speaking ( up 6.7% vs the same time last year - in May). Many buy gas..and everybody eats (even bulemic supermodels)..those two factors affect most of the population on a daily basis. Rental car prices and airfares , according to the report, have decreased 12+ and 13+ %, respectively vs May of last year; that might be a bit of good news for some Vegas visitors (or not; both are good news for some of us).
Anyway, I'm looking forward to the football season...it's a reasonable distraction from all this economic reality.
Thats right - inflation went up 10-20 percent since Biden took office. And wages went up even more.
So we have officially picked up the slack. Wages outpace inflation
And thanks for the breakdown of CPI. The fact that its so scattered proves its not a money supply issue so much as its specific to the circumstances of COVID, Ukraine, and climate. Housing, Rent, and automobiles are actually suffering from a massive supply shortage which is antithetical to our raised interest rate environment. Grain is suffering from Ukraine. And other food is suffering from horrible crop yilds this year.
Gasoline, steel, commodites are all down. They wouldnt be if it was money supply.
The ongoing right wing narrative that David Miller's welfar checks were the primary cause of inflation is largely already been refuted by data - certainly on any sustaining basis. We have enough data now to understand its cause.
What causes inflation since COVID
"Ball and colleagues conclude that the rise in the ratio of job vacancies to unemployment contributed almost a third of the rise in core inflation of 2.0 percentage points over a 12-month period. The 2.0-percentage-point increase in inflation explains about half the rise in core inflation, climbing from 2.3 to 6.9 percent (total increase of 4.6 percentage points). And finally, they found that the main contributors to the headline inflation shocks were energy prices (2.7 percentage points) and a backlog of work (1.7 percentage points)."
