This week’s inflation numbers were a doozy, not just exceeding consensus estimates but also showing that inflation, far from peaking, is still rising. Consumer price figures came in at 9.1% year on year, while producer prices increased 11.3% year on year. Perhaps even more worrying is the month on month increase for consumer prices of 1.3%, which is an annualized rate of almost 17%.
While the increasing inflation may have been surprising, what isn’t surprising is that consumers have started feeling the pinch of this increasing inflation. Consumer behavior has already started to change, with grocery stores noting fewer people buying high end and luxury foods.
Car repossessions have started to increase too, as the bad decisions people made as a result of stimulus checks are now coming back to haunt them. Rather than helping those who really needed it, it looks like the federal government’s stimulus packages incentivized and encouraged profligate, spendthrift behavior. What resulted was an illusion of prosperity, which is now collapsing like a house of cards.
How has your household fared today with rising inflation? Are you starting to feel the pain of rising gas prices and more expensive food? More families than ever today are living paycheck to paycheck, even those making six-figure incomes. So if you’re feeling the pain, you’re not alone.
Unfortunately, relief doesn’t look like it’s anywhere in sight. Even though the Fed has started raising interest rates and reducing the size of its balance sheet, prices are continuing to rise. And the Biden administration isn’t doing anything to help, continuing to push trillion-dollar spending ideas and sending oil overseas where it doesn’t do anything to help lower gas prices.
If you thought help was just around the corner, you may have a while to wait. Even if Republicans win big in the mid-terms, don’t expect Biden to do the right thing and help get this country back on track. It could end up being another miserable two years before we’re finally able to get someone in the White House who actually cares about helping this country.