Thursday, November 11, 2021 by Arsenio Toledo
The new wholesale inflation numbers from September and October prove that the rapid rise in the cost of everyday goods is not “transitory,” contradicting what President Joe Biden has repeatedly claimed.
In September, inflation at the wholesale level rose by 8.6 percent compared to the same month last year.
“Excluding volatile food and energy prices, wholesale inflation was up 0.4 percent in October from September and 6.8 percent from a year ago,” wrote Paul Wiseman for the Associated Press. (Related: Biden’s economic agenda, COVID policies make supply chain crisis worse.)
Much of the increase in overall prices was caused by a jump in the price of wholesale goods, including a 6.7 percent increase in the cost of gasoline. This surge increased the cost of delivering goods, which in turn made retailers push the added costs onto consumers.
This inflation crisis got worse in October, as consumer prices rose at the fastest annual pace in over 30 years.
For October, the consumer price index (CPI) rose by 6.2 percent from the same month last year. The CPI rose by 0.9 percent from September, the largest gain in four months. Both surges in the CPI exceeded the predictions of many economists.
These same economists have noted that the supercharged inflation was caused by the rise in prices for food, fuel, energy and shelter.
“Against a backdrop of solid demand, businesses have been steadily raising prices for consumer goods and services at the same time supply chain bottlenecks and a shortage of qualified workers drive up costs,” wrote Olivia Rockeman for Bloomberg.
Economists are predicting that the inflation crisis might get even worse, especially if Biden and the Democrats push ahead with their plans to pass a $2 trillion tax-and-spending package through Congress.
“Inflation hurts Americans’ pocketbooks, and reversing this trend is a top priority for me,” claimed Biden in a statement.
This statement made it clear that one of the key drivers for the surge in the price of everyday goods was the inflation in energy prices. Biden claimed that his administration is working on ways to reduce those costs.
But so far, the Biden administration has not done anything substantial and is just telling Americans to get used to the price increases. This was made clear when Secretary of Energy Jennifer Granholm said in two different occasions that the administration’s solution is to prepare Americans for further cost increases.
“It will be more expensive this year than last year,” admitted Granholm during one interview.
In a different interview, Granholm was asked what her department’s plan is to help decrease oil prices in America. Her reaction was to laugh at her interviewer and to claim that asking for a solution to the rising gas prices is the same as asking for a wish from a magician.
Economic analysts have pointed out that this approach to dealing with the inflation situation is only likely to turn more people away from the Democrats.
“The costs for low-wage households to cover their commuting costs, grocery bills and rents are eating into the jump they have seen in wages,” wrote Diane Swonk, chief economist for accounting company Grant Thornton, in an analysis of the situation.
“The public is angry,” she continued. “Inflation is sizzling and will likely get hotter before it cools.”
“Republicans are going to double down on this, and the White House knows this,” said one Biden ally who spoke with the Hill. “All of these economic issues are going to add up and this could be incredibly troublesome for the White House. These are the kinds of issues that are make-or-break for voters.”
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