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Inflation Increased 7.5% Over Past 12 Months, Hitting a 40-Year High

Inflation Increased 7.5% Over Past 12 Months, Hitting a 40-Year High

“Food prices surged 7%, the sharpest rise since 1981. Restaurant prices rose by the most since the early 1980s, pushed up by an 8% jump in fast-food prices from a year earlier. Grocery prices increased 7.4%, as meat and egg prices continued to climb at double-digit rates.”

You do not want to hit “high” records when it comes to the Consumer Price Index for All Urban Consumers (CPI-U).

Inflation hit another “high” under Biden. In the past 12 months, inflation increased 7.5%, which is the largest increase in a 12 month period since February 1982.

Everything increased during the last 12 months:

Food prices surged 7%, the sharpest rise since 1981. Restaurant prices rose by the most since the early 1980s, pushed up by an 8% jump in fast-food prices from a year earlier. Grocery prices increased 7.4%, as meat and egg prices continued to climb at double-digit rates.

Energy prices rose 27%, easing from November’s peak of 33.3%. But the jump in electricity costs was particularly sharp when compared with historical trends, with prices up 10.7% from a year ago and 4.2% from December. The latter was the sharpest one-month rise since 2006.

So inflation has been above 5% in the past eight months. It’s transitory, you guys!

Let the spinning begin! We have Biden’s top economic advisor Jared Bernstein:

BERNSTEIN: “I expect inflation to come down significantly in 2022. Now, more to the point, that’s not just my expectation, that’s the expectation of every forecast I’ve looked at and it’s very important. Basically, what the forecast tells you is that the job market should stay tight and get even tighter supporting wage growth while inflation decelerates, while it slows. So virtually every forecast has inflation growing about half as fast this year as it did last year. Now half as fast still might take you above the Fed’s target but if that — if that occurs, that’s going to be a real sign that some of our interventions, some market interventions are helping to ease these price pressures.”

Spin, spin, spin. Gotta give CNN’s Kate Bolduan some credit because she started to get tough with Bernstein until it seems someone behind the scenes told her to back off:

BOLDUAN: “President Biden on December 10th said that he thought inflation was at its peak. The quote was, I think it’s the peak of the crisis. It was not. And I remember very clearly our conversations over the summer when you were talking about inflation being transitory, it was not. Are you being clear eyed enough about what’s going on here?”
BERNSTEIN: “Absolutely. I mean, I think the thing to recognize is that our team at the insistence of the president is focused on not just the month to month ups and downs, but on the underlying trends and there you have to appreciate the fact that –” [crosstalk]
BOLDUAN: “Yeah, but I’m talking about underlying trends. The trends are not –”
BERNSTEIN: “Yeah, and –”
BOLDUAN: “– go ahead.”
BERNSTEIN: “– so that — and so that’s the point. We’re going to get some months coming better, some months coming worse, probably when the president said that Omicron wasn’t going quite in the picture yet.”

Strong economy? Let’s rethink this because the Fed (which should end NOW) will likely raise interest rates before July.

That will likely cause the stock market to crash because the bull market has even been driven a lot by low-interest rates over the past decade or so.

When interest rates are low the bond investors have gotten zero return for their principal. Therefore the money flows into equities and higher risk investments.

If bonds start creeping up in yield investors will want to start putting money in there.

The blue line is the market rate for mortgages (government treasury bonds) while the yellow is what the fed controls.

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Comments

You can be sure wages didn’t increase by 7%.

But who cares – let the peasants eat cake.

    Indeed — Those with a net worth over $10 million saw much, much more than a 7% increase. So life is good.

    And that’s really all that matters to the Uni-Party Ruling Class elites, whether they have a D or an R after their name.

When ten year hits 2% as it did today things get interesting. Pun intended. The fed has a mess on it’s hands with no easy choices. Bump 50 BP in March? More likely. Another five or six 25 BP jumps after? More likely.

Then what? Don’t forget the fed is already ‘tightening’ by lowering the amount of their own debt purchases which end completely in March. So continue via rate hikes to reduce liquidity overall without creating a recession…. nope. IMO, a recession is likely because the fed always either under or over corrects.

By some measures, Taylor, the fed rate should be closer to 11% which is unlikely to be acceptable to the politicians or even the fed members themselves. Liquidity has jumped since 2008 to previously unknown levels along with our fiscal debt. $ thirty trillion in federal debt alone and a debt to GDP over 125% is not familiar territory for the US or the dollar as the worlds reserve currency.

The feds ability to raise rates is going to be constrained by practical political considerations. If we had rates up even 2% higher than now the costs of interest payments to service the debt grows enormously. It would crowd out other spending. Imagine how a badly managed State or City budget would be impacted if the cost of debt service increased by even 25%; what gets cut? Police, Fire, Garbage, Sewer plants, how about pension payments? Now imagine less $ available for the various welfare programs and those programs being cut. Scary stuff in a worst case scenario.

Old and busted: The inflation will be temporary.

New hotness: This inflation will actually be a good thing.

Anything anyone says to the contrary is MDM (mis-, dis-, or malinformation). And the perp may be investigated by the Ministry of Truth as a threat to trust in government and a potential domestic terrorist.

Comrade Brandon will outline the new five year plan on March 1.

Welcome to the United Soviet Socialist States of America, comrade.

Let’s Go Brandon!

Almost all of these inflation numbers are actually worse in the real world the peasants live in. For many reasons. Not the least of which is the government does all it can to minimize the reported inflation numbers.

Two examples…

— The numbers do not reflect increases in sales prices. The government only uses non-sale prices. But many peasants shop for food on sale. In my world the ‘sale’ prices on many food items, and many non-food items, have gone up much more than the non-sale prices.

— The ‘official’ data show a 12.25% increase in new car prices. From what I’ve read the price dealers actually charge when an ordered car finally arrives can be arbitrarily increased from the contract price. If you don’t want the car at the new price they don’t have a problem with that for obvious reasons. Also, if that 12.25% is based on MSRP it doesn’t include the ‘market adjustment’ dealers now apply over and above the MSRP.

And so on and so forth.

    CommoChief in reply to JHogan. | February 10, 2022 at 5:46 pm

    True. Also important to watch how inflation is framed by the admin and media allies. Phrases like ‘slowing or decreasing rate of inflation’ and ‘held steady or the same’ all mean increased prices from last month but are presented as positive and improved when in reality they mean less bad than it could have been.

    “Peasants” also shop new cars on sale. When I bought a new Toyota in 2016, I got it for 20% off MSRP from a dealer with a manufacturer rebate. List prices are up now and I bet those big discounts are a thing of the past.

    randian in reply to JHogan. | February 10, 2022 at 7:03 pm

    Yeah, I’m thinking I need to buy out my lease. The 2022 models haven’t even been officially announced yet and I doubt they will by the time my lease expires. Announced pricing is only a few percent increase, but if the dealers are going to pack on “market adjustments” on top of offering no discounts then there’s no reason to buy new. Sorry dealers, you’re screwed if a bunch of people think like me.

      danvillemom in reply to randian. | February 10, 2022 at 7:23 pm

      In Arizona a gallon of premium gasoline was $2.69 before the inauguration in 2021. I just paid $4.89 last week. In CA the same gallon of gas is $5.69. It is now cheaper for us to fly between AZ & SF bay area than to drive. Biden- inflation is a major issue for retirees.

      Ironclaw in reply to randian. | February 10, 2022 at 11:31 pm

      I haven’t bought new in over 20 years, it never made sense to me to pay interest to buy something that depreciates to less than half of it’s value before a four year loan is paid off.

Can the government keep interest rates low or will things get out of control because if the debt?

It seems to me if the Fed increases interest rates as much as some here are predicting, that it will take the real estate market out and shoot it in the head. People who’ve been paying ridiculous prices for new and existing houses for the past few years are going to be in the same boat as was the case back in the ’80’s, when you couldn’t afford to buy a home and nobody could sell one without a huge loss. I got to experience the thrills of foreclosure after I got stuck with an overpriced house I couldn’t unload when I moved out of state to a new job.

    CommoChief in reply to txvet2. | February 10, 2022 at 9:35 pm

    The last time inflation was this high was 1982. For reference the #1 song was ‘Come on Eileen’ by Drug’s Midnight Runners…..more importantly a guy named Paul Volker was Fed Res Chair. Fed funds target rate was near 20% v 0.25% today, the 2yr Treasury rate was upwards of 15% v 2% today. One year CD rates were above 15% v less than 1% today.

    If you don’t remember them ask some older folks about mortgages with a feature allowing a purchaser to ‘assume the rate’ and how valuable that was in selling during late 1970s and early 1980s. Unlikely mortgage rates get completely out of control IMO. Some increase but probably not 1982 levels. No doc no verify mortgages were !mostly wiped out in 2008 and aftermath. Those with adjustable rate mortgages may feel some pain.

Look at the used car prices: +40%. Insane.

I have a single-point inflation tracker since I run the pop fund at work. For a couple of years now, we’ve priced it at 40 cents a can and had enough leftover money at the end of the year to donate a hundred bucks to our local educational camp. It takes scrounging the sales, but we made it easy every year… until now. Price is going up to break even.

Bullshit!

Inflation is closer to 22% according to my checkbook.

He couldn’t care less.

Either could his trashy wife:

Pentagon Commander exposes Jill Biden:
https://citizenfreepress.com/breaking/pentagon-general-rare-criticism-of-jill-biden/

Worst inflation in 40 years.
When Jimmy Carter faceplanted America, he could at least fall back on his competence to farm peanuts.
What’s Brandon got? Grift from Ukraine and China that will dissolve the very week that he does.

“Strong economy? Let’s rethink this because the Fed (which should end NOW) will likely raise interest rates before July.”

One of the primary drivers of the inflation is the string economy. It’s caused a supply and deman issue, along with the Omicron variant it’s been a problem. This is why high interest rates are a global issue, to a lesser or greater extent countries globally have the same issues.

“That will likely cause the stock market to crash because the bull market has even been driven a lot by low-interest rates over the past decade or so.”

The stock market will adjust, I’m not clear that crash is the right term. Don’t think we are in a position to make that call just yet

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