Inflation Jumps to 9.1%, a 40-Year High - Bad News for Consumers and Biden Administration

Inflation Jumps to 9.1%, a 40-Year High - Bad News for Consumers and Biden Administration

Consumer Price Index data for June showed another jump in inflation climbing to 9.1% from a year earlier and it has now hit the fastest pace since 1981 -- far higher than expectations.

The numbers are bad news for consumers and bad news for the Democrats and the Biden Administration.

The only recent good news for consumers has been the dip in gas prices.

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Rhode Island’s average gas price is down 10 cents from last week ($4.81), averaging $4.71 per gallon, AAA announced on Monday.

Monday's price is 30 cents lower than a month ago ($5.01), and $1.68 higher than July 11, 2021 ($3.03). Rhode Island’s average gas price is 4 cents higher than the national average.

 

 

Rents Are Skyrocketing

But, the cost of rent and groceries are hitting American families hard.

“High rents are really troubling because they’re locked in once every year or once every two years, and that’s what leads people to go ask their boss for higher wages,” said Lara Rhame, chief U.S. economist for FS Investments in an interview with the Wall Street Journal.

 

Global Factors

"The global economy has been buffeted by a series of shocks that have not ceased since the coronavirus pandemic began. Factory shutdowns and shipping shortages have roiled supply chains, worker shortages are making it harder for airlines to fly at capacity and for hotels to rent out rooms, and Russia’s invasion of Ukraine has disrupted oil and gas supplies. Economists have spent more than a year struggling to predict how and when inflation will settle back down," reports the New York Times.

“We now understand better how little we understand about inflation,” Jerome H. Powell, the Federal Reserve chair, said on a recent panel in Sintra, Portugal.

 

Politics of Inflation

As Professor Jennifer Lawless, chair of the political science department at the University of Virginia said on GoLocal LIVE, inflation is bad news for incumbents.

Locally, GOP second congressional candidate Allan Fung has been hitting the Biden Administration and Democrats on their inability to manage inflation.

On July 4th he emailed out a flyer on the increase in the cost of celebrating America's independence.