Democrats in the White House and beyond claim that they want to make things better for those living paycheck to paycheck, but they sure aren’t enacting policies that will accomplish these goals.
Only three months into Joe Biden’s term as president, U.S. economic recovery in the wake of COVID-19 is already on the verge of collapse, with April seeing the highest jump in consumer prices for goods and services in more than 10 years, according to Politico.
Prices rose 0.8% in April in what Politico called a “worrisome bout of inflation.” It’s part of a trend that has lasted for at least the last 12 months, over which time “consumer prices have jumped 4.2% — the fastest rise since a 4.9% gain in the 12 months that ended in September 2008,” according to Politico.
And some economists fear that it’s only going to get worse.
Crunching the numbers
According to reports, which cited the latest data from the U.S. Bureau of Labor Statistics, the prices of food, housing, and cars — especially used ones — are all rising, as is the cost of construction materials like lumber amid a boom in the housing market brought on by low interest rates and a surge in demand.
“Costs are rising at every step in the production of many goods,” Jaewon Kang wrote in a Sunday report for the Wall Street Journal.
“Prices for oil, crops, and other commodities have shot up this year. Trucking companies are paying scarce drivers more to take those materials to factories and construction sites,” Kang reported. “As a result, companies are charging more for foods and consumer products including foil wraps and disposable cups.”
How much is temporary?
Federal Reserve Chair Jerome Powell is sure that the increase in prices is a temporary condition related to a rapid reopening of the economy after the coronavirus triggered shutdowns last year, but other economists aren’t so sure.
After all, as Kang noted, businesses are having trouble keeping up with demand for goods and services — and they are having even more trouble hiring the staff they need to ramp back up.
Add to that some $5 trillion in federal relief that has been dumped into the U.S. economy in the months since COVID-19 first reached our shores, and you have a recipe for disaster.
“It looks like inflation pressures are not only building but are likely to be here at least through the rest of the year,” Naroff Economic Advisors chief economist Joel Naroff told Politico. “With growth robust, firms have a measure of pricing power [that] they haven’t had in decades, and they appear to be using it.”
If Biden and other Democrats in Washington don’t shape up their act soon, we could all be in for a world of hurt.