According to a report by Thomas Catenacci of the Daily Caller, the consumer price index (CPI) has witnessed a 4.2% increase during the last 12 months. This is the steepest rise in the CPI since 2008, per a report by the Department of Labor.
Between March and April, the CPI increased 0.8%, per a Labor Department report released on May 12, 2021. The Wall Street Journal reported that economists estimated that the CPI grew by 0.2% in April and 3.6% during the 12-month period that ended in April.
“I think a lot of us are expecting a pretty significant increase of spending on services in the next couple months and that’s where a lot of the pressure on CPI is going to come from,” Richard Moody, chief economist at Regions Financial Corp, said to the WSJ.
“It’s a question of how long that burst in spending persists,” Moody declared. “And the longer it persists, the more latitude producers have to raise prices.”
Catenacci observed that a number of commodities have been surging in price:
The prices of several commodities have already risen rapidly. Lumber, gasoline, steel, copper, computer chips, homes and home appliances have all increased in price.
In a recent jobs report, the US economy only added a meager 266,000 jobs in the previous month, after economists boldly predicted that it would be a million. Organizations like the Chamber of Commerce blamed the dismal jobs report on the continued unemployment benefits in the $1.9 trillion American Rescue Plan.
Despite these uncomfortable economic truths, Democrats insist on putting forward new spending proposals and other welfare programs to get Americans hooked on government largesse.
President Joe Biden, himself, has put forward infrastructure and family spending plans that would roughly cost $4 trillion put together.
All things being equal, inflation will likely take place under the Biden administration’s watch. This problem is structural in nature in that the US government spends too much and its central bank intervenes excessively in the market.
America needs to completely reassess its fiscal and monetary policies if it wants to enjoy any form of economic stability in the long-term.
