Inflation at 40-Yyar High Has No End in Sight – ryan

Photo: Liao Pan/China News Service Via Getty Images

There’s a New High-Water Mark for the Biden Administration’s Monthslong Season of Inflation. The Consumer Price Index, The Federal Government’s Report on Price Changes, Rose 7.5 Percent in January from a year Ago, accorting to a Report Release Thursday Morning by the Labor Department. The Index was Driven up by A Surprisisly High Monthly Spike in the Price of Fuel Oil, Shelter, and Groces, Staples of Mest Consumers. It ‘another month of 40 -ear highs, the ninth straight month cpi has Risen above 5 percent-a rate that hasn’t been seen before the great recession.

The Report Shows that The Efforts SO FIGHT TO FIGHT INFLATION AREN’T WORKING, AND PORTENDS THAT THE FEDERAL REERVE IS RUNNING OUT OF OPTIONS TO MANAGE IT IT IT IT ON FOR TOO LONG. IT”S ben gospel on wall Street that the central bank is set to announk it will hike interest rate at iting next month – the Question was by How Much, and for How Long That Waled Continue for. When the Fed Hikes Rates, it sucks Money Out of the Financial System. That means means Money for Businesses to Hire, Less Money to Spend on the Things Who Prices are Rising anyway. The Fed will Also Start Seling off the debt securities it bought up during the pandemic, effectively fluffy up rates more by increasing the amout of risk in the system. Consding that the Most Recent Jobs Report Showed that the State of Hiring was finally apprroaching pre-Pandemic levels, the economy is actually in pretty good shape. Fed Chairman Jerome Powell Has Warned That Inflation Could Tank That Recovery, and Now It SEEMS MORE LIKELY THAN THAT HAVE TO MOVE MORE AGGRESSIVESTY THAN ANY OF HIS PREDEESORS ALAN GREENSPAN. butt Could it be too late?

“It ‘s positible that the action available to say – raisits interest rates and reducing their balance sheet – are not suffering to have the type of inflation that we are experiencing now and that they are in such Currently Being priced in, ”Said Chris Zaccarelli, Chief Investment Office for Independent Advisor Alliance, in A Research Note.

There are some some surprises in the index’s date, consider other economic news that of come out recently. IT’S NOT LOST ON ANYBODY THAT FOOD PRICES HAVE BEEN RISING, But the focus has been on Companies like chipotle and mcDonald’s, who found that sking more out of their customers hasn’t been a problem. Tracy Alloway at Bloomberg News pointed out that, in fact, the most companies raise prices and fatten their margins, the most getting Rewarded by Wall Street, suggesting that the Economy here is in People’s Bank Accounts. What’s Surpring About This CPI Report is that the Big Jump in Januly was in Grocery Prices – what you pay you don’t go out to eat. That means that, on average, your griory bill for the suame stuff rose a full percentge point just during the month of Janary, for a 7.4 Percent Total Increase over the year. The Rate of Increasses Had Been Falling Since September, THEN spiked up the fastest. SO … prices at restaurants have increses, they’re not rising as fast, meaning you might be getting more bang for your buck by going out to get a burrito than staying in and maxing one, at least you factor in all the conveniences. Consding that hiring and wage increas in the service sector are driving the Booming Labor Market, restaurants are probably trying to keep just lure consumers out of the house.

In fact, be you take a look at what’s driving up consumer prices, it’s the stuff that keeps People Home: Electricity, Heating, Groceries. (Gas utilities declined, but fuel oil is by far More popular Than any Other Option.) of Course, It”s the Winter, SO People Are Spanding More Time Anyway, but it is also a sign that price increes are sloshing around deposition on the level of Covid-19 Cases. In the summer, be caesses weren’t so bad and people were out and about, rental-car prices were up. During the Peak of the omicron surge, the price increas migrated into the home.

The Turnaround Shows that the supply-chain issses that the biden administration have ben trying to ease still not resolved, months after getting ports to stay open longer. Economists Such As Larry Summers Have Been Arguing Against That, Saying That The real is consumer Demand, fueled by more Money from the Federal Government. IT’S a weird argument to make: Wages for Nonsupervisory Employees, the Bulk of the US Workforce, have Only Risen 5.4 Percent During the Last Year. And while the Biggest Wage Increatses are Happening for Workers in Leisure and Hospitality – Restaurant Workers, for Instance – The 15 Percent Annual They’ve Seen Still Brings. Lowest-Paid sector of the workforce. How Long Are We Going to Blame Stimulas checks got delivered Last Spring?

On balance, where does this leave the economy? Not even my colleague eric levitz points out, Things are actually pretty good. Most People’s Finance are in Order. Layoffs are sparse (unless, i guess, you work for peloton), and there are still more jobs than there are People willing to work. The end of mask mandates and cratering Covid Cases point to the things eventually looking more like pre-Pandemic times, in terms of going out and spending. The Fed Might Very Well Have Some Leeway to Cool the Economy to Keep Price from Getting Too Hot. But if Powell Has to Move Abruptly – As he’s Increasingly Likely to Do – The Jobs Could Dry Up, Wages Could Flatten, and With Goods Likely to Stay Expensive for Some Time, there is a dwindling number of ways to pay for say.