Inflation hits 40-year high as prices jump 7% in one year – after Biden insists cost of living was just ‘a bump in the road’
- The Labor Department said on Wednesday that the annual inflation rate in December was 7%, the highest increase since 1982.
- Labor shortages and supply chain chaos are sending more costs to businesses, which forgo higher prices.
- The Omicron variant is wreaking havoc on the labor pool, creating shortages and increasing inflationary pressures
- Biden is under pressure over rising prices and insisted for months the incident was ‘transient’
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The US inflation rate has risen to its highest level in nearly 40 years, adding to the issue as a crisis for consumers and a political obligation for the president. Joe Biden,
The Labor Department said on Wednesday that the consumer price index rose 0.5 percent last month after rising 0.8 percent in November.
This pushed annual inflation to 7 percent in December, the highest increase since June 1982 and above November’s 6.8 percent annual rate.
A labor shortage is driving up wages, sending more costs to businesses, and chaos. the supply chain showing little signs of easing omicron Suggesting that high inflation could persist well into 2022, bypasses millions of workers.
Annual inflation reached 7% in December, the highest 12-month increase since June 1982
Meat display shelves are partially empty as shoppers make their way through a supermarket in Miami on Tuesday. The Omicron version is still disrupting the supply chain causing some empty shelves at stores and increasing inflationary pressure
Excluding volatile food and energy prices, so-called core inflation rose 0.6 percent for the month to an annualized increase of 5.5 percent in December, the fastest 12-month increase since February 1991.
Rising prices have erased the healthy wage growth that many Americans are getting, making it harder for families, especially low-income families, to afford basic necessities.
Polls show inflation has even begun to displace the coronavirus pandemic as a public concern, making clear a political threat to Biden and congressional Democrats, whose House and Senate majorities hang in the balance in November’s election. Huh.
The White House tried to lower expectations ahead of the inflation report on Wednesday morning, months after the Biden administration insisted that rising prices were ‘temporary’.
Biden said last July, “It is very unlikely that this will be long-term inflation that will get out of hand.”
After last month’s inflation report, Biden acknowledged that rising prices were a ‘bump in the road’ but insisted that consumer prices would soon stop.
Republicans were quick to respond to Wednesday’s inflation reading, tweeting House Minority Leader Kevin McCarthy: ‘This trend is not “temporary”, and it is all happening under the one-party control of Democrats.
McCarthy included an animated graphic showing Biden’s face tracking the annual inflation rate from his January 2020 opening to December.
The White House tried to lower expectations ahead of the inflation report on Wednesday morning, months after the Biden administration insisted that rising prices were ‘temporary’.
On Tuesday, Federal Reserve Chairman Jerome Powell, in a congressional hearing that pointed to his possible confirmation for a second term in the job, said the US central bank was determined to ensure that high inflation was ‘infiltrating’. Don’t be
Instead of slashing job growth, it was necessary to tighten policy to sustain economic expansion, he said.
But Powell said a decision on whether to drive the Fed’s $9 trillion balance sheet could take several months, and the lack of a fast timetable for rate hikes supported the riskier asset.
After falling just under 1 per cent on the day, the interest rate sensitive technology sector bounced back and brought the broader indices with them.
On Tuesday, Federal Reserve Chairman Jerome Powell said the US central bank was determined to ensure that high inflation does not become ‘intrusive’
Powell’s comments reassured investors that the Fed would not prioritize a reduction in inflation, said Sean Cruz, senior manager of trader strategy at TD Ameritrade in Chicago.
“The initial concern was that the Fed would affect the pace of the recovery,” Cruz said.
But the investor concluded from Tuesday’s testimony that “he’s not only going to try to crush inflation or worry about the other effects that could have on the economy.” He is also going to be familiar with the implications of the possible repercussions.
The Fed considers a controlled amount of inflation good because it encourages spending and business investment rather than hoarding cash.
But out-of-control inflation can be dangerous, eroding consumers’ spending power and hitting low-income families and elderly pensioners hardest.
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