On December 10, 2021, President Joseph Biden declared of inflation, “It’s the peak of the crisis … I think you’ll see it change sooner than, quicker than, more rapidly than it will take — than most people think.” His prediction of peak inflation occurred when the Bureau of Labor Statistics released a report showing inflation growing at a 6.8% annual clip.
Six months later, peak inflation is nowhere on the horizon. Nearly every month has produced a higher inflation number as outright shortages grip various sectors of the economy. And the latest CPI report showed inflation soaring more than any previous month.
We’re not at the peak of a crisis. We’re just starting.
Inflation runs red hot.
From April to May 2022, inflation increased across all products by 1.0%, the second-fastest month-to-month increase in the past year. Annually, inflation shot up by 8.6%, the fastest rate recorded during this crisis and the biggest increase since 1981.
The CPI report also found that “the energy index rose 34.6% over the last year, the largest 12-month increase since the period ending September 2005. The food index increased 10.1% for the 12-months ending May, the first increase of 10% or more since the period ending March 1981.”
If you’ve purchased gas or diesel in the last month, you’ve experienced the skyrocketing prices firsthand. It’s important to remember that the latest CPI report records everything from last month — not what we’re experiencing right now. Costs have gone up even further.
Gas prices have soared above $5.00 a gallon average nationwide this past week. YahooNews noted a truck driver’s post on Facebook, which said, “it has cost him over $20,000 a week to keep his three trucks running. “If something drastic doesn’t change in the next few weeks/months, I promise you, you’ll see empty shelves everywhere you look,” Smith wrote in a post that was shared nearly 290,000 times. “You’ll see chaos as people fight for the basic necessities of everyday life.”
Food prices are soaring.
The scary part for the average consumer, beyond fuel, is food. The CPI report had nothing but historic numbers.
The BLS reported, “The food at home index rose 11.9% over the last 12 months, the largest 12-month increase since the period ending April 1979. All six major grocery store food group indexes increased over the span, with five of the six rising more than 10%. The index for meats, poultry, fish, and eggs increased the most, rising 14.2%, with the index for eggs increasing 32.2%. The remaining groups saw increases ranging from 8.2% (fruits and vegetables) to 12.6% (other food at home).”
These are all comparisons to this time last year. Prices as a whole are up considerably more.
Housing costs are going up too.
Food and energy were not the only bad readings in the report. Housing costs are starting to drive up the overall inflation number too. “The shelter index increased 0.6% in May, the largest monthly increase since March 2004. The rent index rose 0.6% over the month, the same increase as in April, and the owners’ equivalent rent index also rose 0.6%.”
What does this look like in real terms? Redfin, a technology site that lists and tracks real estate rental and sale properties, said, “The median monthly asking rent in the U.S. surpassed $2,000 for the first time in May, rising 15% year over year to a record high of $2,002 … Asking rents surged 48% year over year in Austin, TX—the largest increase on record in any metro area since at least the beginning of Redfin’s rental data in 2019. Nashville, TN, Seattle, and Cincinnati also saw asking rents increase over 30% from a year earlier.”
In terms of bad reports, this inflation report was an outright disaster. There was no good news for the White House, Congressional Democrats, Federal Reserve, or the American consumer. Everything within the report killed the notion of peak inflation and suggested that the Federal Reserve is behind the curve in meeting the inflation crisis head-on.
A desperate White House.
Where does that leave us? A White House in crisis while responding to a crisis. There is no plan. That’s why they’re pivoting to attacking Republicans.
MSNBC host Stephanie Ruhle tweeted, “WHAT IS THE REPUBLICAN PLAN TO COMBAT INFLATION?” This tweet got retweeted by White House Chief of Staff Ron Klain. Desperation is taking over because they don’t know what they’re doing — so now they’re trying to say that no one could solve this situation.
Democrats are taking that point because they have to reject the solution that works. The last time the United States had an inflation problem this bad, Federal Reserve Chair Paul Volker and President Ronald Reagan solved the problem. Volker radically raised rates to historical levels to kill inflation. At the same time, Reagan unleashed a wave of help to the supply-side of the economy. That combo killed inflation and saved the economy.
Biden and Democrats reject that supply-side economics help anything. But we’re in a moment where the supply-side of the economy is messed up. We need more oil, gas, and diesel in circulation to lower prices for everyday Americans. They don’t have a plan because that would require admitting conservatives are right.
The solution is there. Conservatives have solved this once; they’ll likely have to do it again. The ideological blinders of the left prevent them from being able to solve inflation. In the meantime, it’s more pain for us.