Inflation hit a 40-year high in February, with the Consumer Price Index rising nearly 8 percent over last year. The White House reacted by pointing out that “Americans’ budgets are being stretched by price increases and families are starting to feel the impacts of Putin’s price hike.”

Setting aside the fact that only a fraction of February’s inflation report captures the February 24 Russian invasion of Ukraine, the administration’s attempt to blame a foreign dictator for its own year-long mismanagement of the American economy is both cynical and easily debunkable.

Let’s start with oil.

Jen Psaki sent out an explainer on why gas prices are rising. “You may have noticed this week that your gas prices have gone up,” the White House press secretary said before blaming Putin, noting that the “only way to protect the U.S. over the long term is to become energy independent.”

In what way has Biden moved to make us energy independent? The administration approached OPEC+ last summer, long before Putin’s invasion, and asked the cartel to increase production. The administration argued at the time that affordable energy — which it had worked to undermine domestically — was imperative for economic growth.

And yet…

On September 4, 2019, when Democratic Party presidential candidate Joe Biden promised at a CNN “Climate Crisis” town hall that he would end all new drilling on federal lands, the national average for a gallon of gas was $2.59. On April 27, 2020, it was down to $1.77. On Inauguration Day 2021, the price was $2.37. It was at $2.39 the day Biden signed an executive order pausing all new government leases on public lands, where nearly a quarter of oil production takes place. Gas was at $3.00 when Biden lifted Trump-era sanctions against Putin’s Nord Stream 2 pipeline. It was $3.00 on the day Biden officially killed the Keystone pipeline in June 2021. It was at $3.09 when the Interior Department stopped pursuing drilling in the Gulf of Mexico over concocted “social cost of carbon” externalities. It was at $3.50 the week that oil-rich Gulf leaders refused to take Biden’s calls because his administration was forging a deal (with the help of Russia) to empower their enemies in Iran. It was at $3.60 the day Putin invaded Ukraine and at $4.10 the day Biden sent envoys to Venezuela to ask for oil.

There is, of course, the depressing possibility that when Psaki calls for “energy independence” she means turning to inefficient solar and wind — currently only a sliver of our energy portfolio — and retrofitting the entire American infrastructure to accommodate them, along with replacing 290 million cars on the nation’s roads with pricey, impractical electric models. If so, that would mean the administration is alarmingly unserious or dangerously delusional.

And if the Russian dictator is at fault for soaring prices, why did Democrats tell us last year that inflation was merely “transitory”? Did we have Putin-flation on July 19, 2021, when Biden was falsely claiming that “nobody” was “suggesting there’s unchecked inflation on the way — no serious economist”? After throwing nearly $2 trillion into an overheated economy, on top of the $3 trillion bipartisan COVID-relief bill that came before it, Biden was downplaying inflation fears for partisan reasons, working to ram through the Democrats’ $5 trillion policy goody bag (which would have also increased demand and added $3 trillion to the deficit).

Then again, blaming the invasion of Ukraine for inflation is almost, though not quite, as transparently stupid as arguing that Build Back Better “costs zero dollars.”

When it comes to inflation or the price of commodities, there is only so much a president can do. Of course Biden will still take credit for every morsel of positive economic news, like the return of jobs in states decimated by government-imposed COVID lockdowns, that he has absolutely nothing to do with. But the president has done nothing that would help the economy weather a future shock and nothing to expand “energy independence.” His administration has exacerbated inflationary pressures and suppressed domestic energy production — nearly every climate plan Democrats have proposed intends to artificially create scarcity to disincentivize the use of fossil fuels. Right now, Biden is reduced to flailing (and failing) attempts to get either erstwhile allies or our enemies to send us more oil.

Putin’s nefarious aggression against Ukraine will impose heavy costs on the world, no doubt. But Biden should not get a pass for his amateurish mismanagement of the economy and foreign affairs.

Source: https://www.nationalreview.com/2022/03/bidens-cynical-attempt-to-blame-putin-for-inflation/?utm_source=recirc-desktop&utm_medium=blog-post&utm_campaign=river&utm_content=more-in&utm_term=first

The post Biden’s Cynical Attempt to Blame Putin for Inflation first appeared on Garner Ted Armstrong Evangelistic Association.

Inflation surged more than expected in January, notching another four-decade high as strong consumer demand and pandemic-related supply-chain snarls fueled rapid price gains that wiped out the benefits of rising wages for most Americans.

The consumer price index rose 7.5% in January from a year ago, according to a new Labor Department report released Thursday, marking the fastest increase since February 1982, when inflation hit 7.6%. The CPI – which measures a bevy of goods ranging from gasoline and health care to groceries and rents – jumped 0.6% in the one-month period from December.

Economists expected the index to show that prices surged 7.3% in January from the previous year and 0.5% on a monthly basis.

So-called core prices, which exclude more volatile measurements of food and energy, climbed 6% in January from the previous year – a sharp increase from December, when it rose 5.5%. It was the steepest 12-month increase since August 1982.

“U.S. annual CPI is the highest since 1982, and what’s worse is that this likely isn’t the peak,” said Seema Shah, chief strategist at Principal Global Investors. “Higher-than-expected monthly gains in core CPI indicate continued underlying heat and will do nothing to relieve pressure on the Fed to tighten sharply and urgently.”

Stocks declined after the report, with tech leading the broad market selloff.

Rising inflation is eating away at strong wage gains that American workers have seen in recent months: Real average hourly earnings rose just 0.1% in January from the previous month, as the 0.6% inflation increase eroded the 0.7% total wage gain, according to the Labor Department. On an annual basis, real earnings actually declined 1.7% in January.

Price increases were widespread: Although energy prices rose just 0.9% in January from the previous month, they’re still up 27% from last year. Gasoline, on average, costs 40% than it did last year. Food prices have also climbed 7% higher over the year, while used car and truck prices – a major component of the inflation increase – are up 40.5%. Shelter costs jumped 0.3% for the month and 4% year-over-year.

The inflation spike has been bad news for President Biden, who has seen his approval rating tumble as consumer prices rise. The White House has blamed the price spike on supply-chain bottlenecks and other pandemic-induced disruptions in the economy, while Republicans have pinned it on the president’s massive spending agenda and his energy policies targeting the oil and gas industries.

The eye-popping reading – which marked the eighth consecutive month the gauge has been above 5% – could also amp up pressure on the Federal Reserve to kick off its interest rate increases next month with a half-basis point hike. Raising interest rates tends to create higher rates on consumers and business loans, which slows the economy by forcing them to cut back on spending.

Traders are now pricing in over a 44% chance of a hefty half-point rate jump when policymakers meet next month, instead of a more modest quarter-point increase. It would mark the first time since 2000 that the U.S. central bank raised the federal fund rate by 50 basis points. The Fed has not raised rates since December 2018. The odds of a sixth quarter-basis point hike this year, meanwhile, jumped to 63% after the inflation report.

“At this point it’s not a question of will they, won’t they – it’s a question of how many hikes we’ll see in 2022, and what the magnitude and pace will be,” said Mike Loewengart, managing director of investment strategy at E*Trade. “Given views on these aspects are all over the map at this point, there is a lot for the market to be uncertain about.”

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Fed Chairman Jerome Powell has left open the possibility of a rate hike at every meeting this year and has refused to rule out a more aggressive, half-percentage point rate hike, but said it’s important to be “humble and nimble.”

“We’re going to be led by the incoming data and the evolving outlook,” he told reporters during the central bank’s policy-setting meeting last month.

Source: https://www.foxbusiness.com/economy/consumer-price-index-inflation-january-2022?test=38861ea43380e1402f1c90f21546ad4b

The post Inflation accelerates 7.5% in January, hitting a fresh 40-year high first appeared on Garner Ted Armstrong Evangelistic Association.

Inflation rose at the fastest pace in nearly four decades in December, as rapid price gains fueled consumer fears about the economy and sent President Biden’s approval rating tumbling.

The consumer price index rose 7% in December from a year ago, according to a new Labor Department report released Wednesday, marking the fastest increase since June 1982, when inflation hit 7.1%. The CPI – which measures a bevy of goods ranging from gasoline and health care to groceries and rents – jumped 0.5% in the one-month period from November.

FED DOUBLES TAPER RATE, EYES THREE INTEREST RATE HIKES IN 2022
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Economists expected the index to show that prices surged 7% in December from the year-ago period and 0.4% from the previous month.

So-called core prices, which exclude more volatile measurements of food and energy, soared 5.5% in December from the previous year – a sharp increase from November, when it rose 4.9%. It was the steepest 12-month increase since 1991.

Despite the red-hot reading, stock market futures rose following the data release.

Price increases were widespread: Although energy prices fell 1.1% in December from the previous month, they’re still up 29.3% from last year. Gasoline, on average, costs 49.6% than it did last year. Food prices have also climbed 6.3% higher over the year, while used car and truck prices – a major component of the inflation increase – are up 37.3%. Shelter costs, which make up nearly one-third of the total increase, jumped 0.4% for the month and 4.1% year-over-year, the fastest pace since February 2007.

“Inflation at 7% is no joke,” said Seema Shah, chief strategist at Principal Global Investors. “It’s the highest annual CPI number since 1982 and driven not by energy prices, but by just about everything else.” While Shah said December’s number could mark the peak for annual inflation readings amid signs that supply strains are easing, other experts suggested the rampant spread of the omicron variant could bring about new difficulties for the global supply chain.

Rising inflation is eating away at strong gains and wages and salaries that American workers have seen in recent months: Real average hourly earnings rose just 0.1% in December, as the 0.5% inflation increase eroded the 0.6% total wage gain, according to the Labor Department. On an annual basis, real earnings actually declined 2.4%.

The inflation spike has been bad news for President Biden, who has seen his approval rating plunge as consumer prices rose. The White House has blamed the price spike on supply-chain bottlenecks and other pandemic-induced disruptions in the economy, while Republicans have pinned it on the president’s massive spending agenda.

The eye-popping reading – which marked the seventh consecutive month the gauge has been above 5% – will likely amp up pressure on the Federal Reserve to begin hiking interest rates as soon as March in order to combat the recent price surge. Hiking interest rates tends to create higher rates on consumers and business loans, which slows the economy by forcing them to cut back on spending.

“The Federal Reserve will most likely raise interest rates earlier than anticipated to control inflation,” said Dawit Kebede, senior economist at the Credit Union National Association. “This is in addition to ending its support for the economy in the form of large asset purchases. This will raise the cost of borrowing for consumers and will reduce excess demand for goods.”

Chairman Jerome Powell has already signaled the U.S. central bank plans to speed up its withdrawal of support for the U.S. economy in order to combat inflation, which has been higher and longer lasting than policymakers initially expected.

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“As we move through this year, if things develop as expected, we’ll be normalizing policy, meaning we’re going to end our asset purchases in March, meaning we’ll be raising rates over the course of the year,” Powell told the Senate Banking Committee during his confirmation hearing on Tuesday. “At some point perhaps later this year we will start to allow the balance sheet to run off, and that’s just the road to normalizing policy.”

Source: https://www.foxbusiness.com/economy/december-inflation-consumer-price-index

The post Inflation surges 7% in December, highest rate in 40 years first appeared on Garner Ted Armstrong Evangelistic Association.