U.S. Inflation is the Highest in 40 Years
Posted on 01/12/2022
Inflation has taken away all the wage gains for U.S. workers and then some. Most Americans saw their real wages drop in 2021, according to the BLS.
Runaway inflation, also referred to as a hidden tax by economists, is plaguing the U.S. consumer and the Biden administration is running out of options to tame it. Inflation has been eating into otherwise strong wage gains for American workers. The consumer price index (CPI) is an inflation gauge that measures costs across dozens of items. The CPI rose 7% in December 2021 from a year earlier, the fastest pace since June 1982. Excluding food and energy, core CPI was up 5.5% on the year, the biggest growth since February 1991. This also comes amid a shortage of goods and workers, as grocery shelves in certain cities and towns are partially barren.
Gas prices last year were up more than 50% in 2021. Used car prices more than 30%. People experiencing the most harm are those in the lowest income groups.
Rising U.S. Food Prices
Change from December 2020 to December 2021
Fats and oils, 8.8%
Fish and seafood, 8.4%
All grocery items, 6.5%
Nonalcoholic beverages, 5.2%
Fruits and vegetables, 5%
Bakery products, 4.8%
Cereals and cereal products, 4.8%
Sugar and sweets, 4.6%
Alcoholic beverages, 2.3%
Dairy products, 1.6%
Source: Bureau of Labor Statistics (BLS)
Officials at the Federal Reserve walked backed their analysis on seeing inflation in the U.S. as “transitory”. The Federal Reserve has started to lose control of the inflation narrative and is losing credibility among global institutional investors.
Keywords: Federal Reserve System.