So far, the economy of President Joe Biden has been marked so far by out-of-control inflation. Now, even those closest to him have been forced to admit they were wrong when they claimed it was temporary.
Treasury Secretary Janet Yellen tried to spin it as a positive when she spoke to NPR’s “Marketplace” show this week when she said inflation wouldn’t linger beyond next year.
But she was not-so-subtly moving the goalpost.
For most of the year, Biden and those around him insisted that the runaway inflation that’s given consumers so much pain would be over in a flash.
“It’s most likely that it’s going to peak in the next few months,” an unnamed administration official told Reuters back in spring. “We’ll probably see the worst of it this summer, and (then) in the fall, things will probably start to get back to normal.”
Except that wasn’t the worst of it – not by a longshot, as the latest numbers show prices spiking well into autumn.
The Consumer Price Index shot up by 6.2 percent in October compared to a year ago, the biggest jump in more than 30 years.
The last time the CPI jumped that high, N.B.C.’s Cheers was the top show on TV .
Core inflation, a measure that doesn’t include food and energy prices — jumped 4.6 percent, another three-decade high.
But those numbers only tell part of the story.
Fuel oil jumped 12.3 percent for the month and 59 percent year-on-year as much of America heads into the cold winter months.
While food in general is up 5.3 percent from a year ago, the essentials on the table at every meal – meat, poultry, fish and eggs – jumped 11.9 percent year-over-year.
And anyone who’s tried to buy a car knows the story with those: If you can even find one, prepare to open up your wallet. New cars are up 9.8 percent year-over-year, while used vehicles skyrocketed by 26.4 percent.
When goods cost more, people “earn” less, since more of their cash goes toward purchasing essentials.
As a result, the 4.9 percent increase in hourly earnings this year was essentially wiped out by inflation. “Real wages,” the measure of how far the average person’s money goes, dropped by 1.2 percent.
In other words, American families are paying more every day, for everything, and keeping less, with no end in sight as Yellen admits inflation will be with us into next year.
She claims it’ll eventually settle down at a “normal” 2 percent.
But even that prediction could be way off the line.
The New York Times reported this week that bond traders are bracing for a much longer period of inflation, with a key measure of the bond market called the “break even” rising to 3.10.
“It essentially means that investors now expect inflation to average about 3.10 percent a year for the next five years, far higher than at any time in the decade before the pandemic hit,” the newspaper reported.
Experts say they don’t see an end in sight – and some are predicting a difficult time ahead.
“Inflation is clearly getting worse before it gets better, while the significant rise in shelter prices is adding to concerning evidence of a broadening in inflation pressures,” Seema Shah, chief strategist at Principal Global Investors, told CNBC.
Even the I.R.S. has been forced to concede that inflation is taking a massive bite out of the dollar. The agency just adjusted its rate brackets, with the income needed to join the top bracket jumping by a very unusual $20,000.
That’s good news, perhaps, for those near the top who will avoid the highest tax rate.
But the average person will be feeling the sting of inflation… however long it lasts.
— Walter W. Murray is a reporter for The Horn News. He is an outspoken conservative and a survival expert.