Thursday, August 5, 2021

Key Inflation Indicator Up 3.5% Year Over Year In June for Fastest Gain IN 30 Years; Biden Inflation is Here and It’s Going to Get Much Worse; Most Voters Hold Biden Admin Responsible for Higher Inflation, and related stories

Key inflation indicator up 3.5% year over year in June for fastest gain since 199:
An inflation indicator that the Federal Reserve uses as its key guide rose 3.5% in June, a sharp acceleration that was nonetheless right around Wall Street expectations, the Commerce Department reported Friday.
The personal consumption expenditures price index, which excludes food and energy, was expected to increase 3.6% at a time when the U.S. economy has seen its highest inflation pressures in more than a decade.
That gain was slightly ahead of the 3.4% May increase and represents the biggest move since July 1991.
Fed officials have said they expect the inflation surge to be transitory as it has come largely from industries sensitive to the economic reopening, as well supply chain bottlenecks and other issues likely to fade. The central bank targets 2% as its desired inflation goal, though officials are willing to tolerate higher levels temporarily as the economy tries to get back to full employment. --->READ MORE HERE
Illustration by Linas Garsys/The Wash Time
Biden inflation is here and it’s going to get much worse;:
Both individuals and countries are very good at getting themselves into situations with no easy or painless way out. The U.S. now faces a major inflation threat, an unraveling in Afghanistan, a dependency on China for most of the base compounds for antibiotics and many other pharmaceuticals, and a dependency on one company in Taiwan for most high-end semiconductor chips. All of these situations could have been prevented before reaching the current dangerous situation, although they were seen by some. (This column will deal with inflation, and the other issues will be dealt with in future columns.)
The Washington establishment, and more specifically the Federal Reserve and the U.S. Treasury, were taken by surprise by the latest inflation numbers (more than 5 percent in the Consumer Price Index), even though many of us in the private sector had been warning about the situation for months. The Fed and Biden Administration have argued that the higher inflation numbers are only temporary and caused by short-term supply shortages as the economy rebuilds after the COVID-19 shutdowns. There is some truth to this argument, particularly shortages in some basic materials that have caused big price surges that are already beginning to abate.
However, there is a more fundamental problem, and that is there has been an enormous surge in the money supply. Much of this money supply increase is held in the form of record-high savings, particularly by higher income groups, which is inducing them to buy goods and services at a rapid clip. This would be fine if supply, in many cases, was not being restricted by government policy. For instance, very high government unemployment payments, which are continuing in some states, have the unintended effect of causing many potential workers to stay home rather than take available jobs. As a result, businesses cannot hire the needed number of workers, causing them to reduce hours or production. --->READ MORE HERE
Follow links below to related stories:

Most voters hold Biden administration responsible for higher inflation

Core Inflation Hits Highest Level in 30 Years

Republicans charge crime, inflation, and border will drive 2022 Biden rebuke

Biden’s reckless tax-and-spend plan will make inflation worse

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