U.S. Inflation Rate Rises To 7% – The Highest Level Since 1982
Rising inflation is one of the big topics in the United States in 2022, as the U.S. Labor Department’s data published on Wednesday indicated that the consumer price index (CPI) rose to 7% in December.
The rise in inflations represents the largest annual jump since 1982. Federal Reserve governor Lael Brainard is set to tell congressional leaders today that the central bank is focused on battling inflation. Moreover, members of the Democratic party are concerned that the rising inflation may cost the Biden administration politically.
U.S. Labor Department published CPI data on January 11, 2022, the for December and the metrics indicate that the U.S. inflation rate jumped 7% year-over-year (YoY) and last month was the third consecutive month over 6%. The rise is the highest jump the CPI has seen since June 1982 as inflation is making the cost of goods and services spike exponentially.
The CPI is a measure of a basket of consumer goods and services urban consumers pay for on a regular basis.
Since the Labor Department published the statistical estimate, the CPI jump made headlines and ignited a number of discussions about inflation on social media and forums.
What made everything worse was the U.S. producer price inflation rate, or wholesale prices, jumped 9.7% in December from a year ago, which is the highest YoY record to date. The inflation levels have caused a number of U.S. officials to grow concerned about the lack of purchasing power Americans are dealing with today.
Fed Governor Plans to Address Inflation Concerns
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 saying:
“[Federal Reserve’s] policy is focused on getting inflation back down to 2% while sustaining a recovery that includes everyone.”
The pervious day, Florida governor Ron DeSantis said that he had proposed a bill to help Florida families stave off inflation burdens. He tweeted:
“To help alleviate the burden of inflation on Florida families, I am proposing a $1 billion gas tax holiday to help reduce prices at the pump. If Washington, D.C., won’t change course, then we have a responsibility to step up on behalf of Floridians.
If Washington, D.C., won’t change course, then we have a responsibility to step up on behalf of Floridians.”
To help alleviate the burden of inflation on Florida families, I am proposing a $1 billion gas tax holiday to help reduce prices at the pump.
If Washington, D.C., won’t change course, then we have a responsibility to step up on behalf of Floridians. pic.twitter.com/F0S6QBLGHB
Biden & Democrats Might Have A Political Issue Over Inflation
There have been numerous headlines on Thursday that say “Democrats worry Biden could pay the political price for rising inflation.”
According to CNN analysis “inflation concerns could spell trouble for Democrats.”
However, Jared Bernstein, Biden’s economic adviser, does not believe the concerns have any merit, when discussing the subject with CNN’s Jim Sciutto. He said:
“It’s really important to get under the hood of these monthly inflation reports.
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 followed the same narrative saying:
“Today’s inflation numbers show a meaningful reduction in headline inflation over [the] last month. We are making progress in slowing the rate of price increases. But there is still more work to do — I remain focused on lowering costs for families and maintaining strong economic growth.”
US Officials Laughed At on Social Media
Rising inflation lead to a number of jokes on social media about politicians and the U.S. central bank. Square and Twitter founder Jack Dorsey 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.”
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.
