(Ben Zeisloft) The Consumer Price Index (CPI) rose 8.6% between May 2021 and May 2022, meaning that inflation surpassed record highs, a Friday morning report from the U.S. Bureau of Labor Statistics revealed.
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by Ben Zeisloft, June 10th, 2022
The new figure surpassed the Dow Jones estimate of 8.3% year-over-year inflation — the same level seen in April 2022, according to CNBC.
Inflation refers to the percent change in the price level over a given period of time. The CPI, for example, tracks a hypothetical basket of goods and services that represents typical spending for an American household. A similar metric — Producer Price Index (PPI) — tracks price levels for businesses.
Though unemployment remains low in the United States, inflation has led to a drop in real average hourly earnings. Even as wages nominally grew between April 2021 and April 2022, real earnings dropped by 2.6% due to the faster rate of inflation.
In a recent CNBC survey of chief financial executives, more than 40% believed inflation is the main external risk factor for their business. Meanwhile, 23% point to Federal Reserve policy and 14% point to the war in Ukraine.
President Joe Biden and Treasury Secretary Janet Yellen met last month with Fed Chair Jerome Powell. “He’s wanting to show that he’s fully supportive of the Fed’s move to hike interest rates to deal with inflation,” Desmond Lachman, a former International Monetary Fund official, told The Daily Wire at the time, noting that Biden also needs “to show that he is serious about inflation” from a political standpoint.
Indeed, polls consistently indicate that voters are worried about rising price levels ahead of the midterm elections.
Amid the Russian invasion of Ukraine, gas prices reached $5 per gallon in the United States on Thursday morning. “It’s a very visible product — it’s something that psychologically is quite a big deal, because you fill up your car every week or so,” Lachman added, affirming that the high prices are causing Americans to “pull back” on spending.
On the day of Biden’s inauguration, gas cost $2.39 per gallon. Yet as Americans contend with the higher fuel prices, the Biden administration is facing criticism for nixing expansions to the Keystone XL Pipeline last year and dragging its feet on issuing oil and gas permits. Soaring energy prices raise business’ costs and reduce their profitability — an effect that ripples through the economy and causes prices for all goods to increase.
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Source:
https://www.dailywire.com/news/inflation-reaches-8-6-setting-new-four-decade-high
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