Today’s announcement by the government showed that inflation in May was 8.6 percent. This is a full percentage point more than April, and it shatters any hopes of price increases being moderated in 2022.
This is the largest increase in percentage points since 1981.
All things went up but the price of fuel and food increased immensely.
Greg McBride, the chief financial analyst at Bankrate, said that “so much for the idea of inflation having peaked.” “Any hope that the Fed will ease up on rate hikes after its June and July meetings seem unlikely.” “Inflation is still a problem and any hope for improvement has been lost.”
New York Times: The policymakers want to achieve 2 percent inflation over time, using a related index that is also very high. In an attempt to cool down consumer and business demand, central bankers raise interest rates in order to make borrowing more expensive. This gives supply the chance to catch up and sets the stage for moderate inflation.
The Fed’s attempts to reduce inflation by slowing the economy is contributing to an already poor economic climate. As households bear the brunt of rising prices, consumer confidence has declined all year. President Biden’s approval rating has also fallen. Wall Street economists, as well as small-business owners, are increasingly concerned about the possibility of a recession in the coming year.
Food prices are up 10.8 percent for the year that ended in April 2022, the largest increase since November 1980.
For those who were born in the late 1970s or early 1980s, it’s like a nightmare. The impact that price rises will have on Americans younger than 50 is not known.
These prices will not ever go back down– they are constant. Even if inflation is brought back to 2 percent per year by the Fed, the baseline price index will not change.
It is going to take at least a generation for American workers to be able to catch up to Biden’s inflation.
BLS: The increase was broad-based, with the indexes for shelter, gasoline, and food being the largest contributors. After declining in April, the energy index rose 3.9 percent over the month with the gasoline index rising 4.1 percent and the other major component indexes also increasing. The food index rose 1.2 percent in May as the food at home index increased 1.4 percent.
The index for all items less food and energy rose 0.6 percent in May, the same increase as in April. While almost all major components increased over the month, the largest contributors were the indexes for shelter, airline fares, used cars and trucks, and new vehicles. The indexes for medical care, household furnishings and operations, recreation, and apparel also increased in May.
We have been assured by the government that inflation will not become a problem. If it does, it will “moderate” very quickly. It is still a problem, we have not seen any moderation yet while many families struggle to get back, and honestly, I don’t see an end in sight for the inflation that demented Joe has caused.