One of the hottest topics in the United States in 2022 is the rising inflation, as the U.S. Labor Department’s data published on Wednesday indicated that the consumer price index (CPI) rose to 7% in December. It is the highest annual increase since 1982. Lael Brainard, the Federal Reserve Governor will tell Congress today that inflation is what central banks are focused on. Members of the Democratic Party are also concerned about the possibility that rising inflation could cost the Biden government politically.
CPI Rate Rises to 7%; Wholesale Prices Jump 9.7%
U.S. Labor Department published CPI data December 2022. The metrics indicated that the U.S. inflation rate rose 7% (YoY) last month and has been over 6% for three consecutive months. This is the largest jump in the CPI since June 1982, as inflation causes the price of goods and services to rise exponentially. The CPI measures the cost of all consumer goods and services that urban residents pay on a daily basis.
Following publication of the Labor Department’s statistic estimate, headlines were made about the CPI leap and sparked a lively debate. number of discussionsYou can find information about inflation in social media forums. To make matters worse, U.S. wholesale price inflation rates (or producer prices) rose 9.7% to December from last year, the highest YoY record. Many U.S. officials have become concerned at the current lack of buying power facing Americans.
Federal Reserve Governor Will Address Inflation Concerns. State Governors Respond
On Thursday, Federal Reserve governor Lael Brainard plans to discuss the central bank’s focus on the inflation issue in prepared testimony to the U.S. Congress. Brainard released a statement on Wednesday, which said the Federal Reserve’s “policy is focused on getting inflation back down to 2% while sustaining a recovery that includes everyone.” The day prior, Florida governor Ron DeSantis said that he had proposed a bill to help Florida families stave off inflation burdens. DeSantis tweeted:
In order to ease the inflation burden on Florida families, I propose a $1Billion gas tax holiday. This will help lower prices at the pumps. If Washington, D.C., won’t change course, then we have a responsibility to step up on behalf of Floridians.
Headlines Show Biden, Democrats Could Pay a ‘Political Price’ Over Inflation — Biden Administration Dismisses Concerns
Meanwhile, there are numerous headlines on Thursday that say “Democrats worry Biden could pay the political price for rising inflation.”
A CNN analysis written by Maeve Reston and Stephen Collinson says “inflation concerns could spell trouble for Democrats.” However, Jared Bernstein, Biden’s economic adviser, dismissed the concerns when discussing the subject with CNN’s Jim Sciutto.
“It’s really important to get under the hood of these monthly inflation reports,” Bernstein told Sciutto. “And if you look at the change from November to December, inflation is up half a percent. That’s considerably down from October and November, when inflation was up, .8 and .9%, respectively.” U.S. President Biden reiterated the same commentary and said:
Today’s inflation numbers show a meaningful reduction in headline inflation over [the] last month. Progress is being made in slowing down the pace of price rises. But there is still more work to do — I remain focused on lowering costs for families and maintaining strong economic growth.
US Officials Ridiculed on Social Media, Economist Peter Schiff Says Rates Far Worse Than the ‘Government’s Cooked CPI’
Politicians and the U.S. central banking were mocked on social media for their rising inflation. Jack Dorsey is the Square and Twitter founder said “Damn, Santa didn’t take the transitory inflation away.” Northman Trader’s Sven Henrich jokingly tweeted: “SPX turns red as the inflation party has run out of free drinks.”
Gold bug and economist Peter Schiff discussed the inflation subject in a blog post called: “The Inflation Freight Train.” Schiff’s blog post reminds Americans that the CPI formula is considered inaccurate and inflation is likely much higher.
“Keep in mind, this is using the cooked government CPI formula that understates inflation,” Schiff’s editorial claims. “If the government was still using the formula that it used in 1982, inflation would be higher in 2021 than it was then. In fact, we’d have the highest level of inflation in history. According to Shadowstats, it would be just over 15%,” the blog post adds.
What do you think about the rising inflation in the United States and the criticisms of the country’s political leaders? Please comment below on your views.
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