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Skyrocketing inflation breaks 12-year record in the US

President Biden, Bureau of Labor Statistics, Bloomberg

Economy

Skyrocketing inflation breaks 12-year record in the US

United States is witnessing a skyrocketing inflation that already broke the record of past 12 years. Writes Art Moore

“Should Americans be worried about inflation, sir?”

That was a question posed to President Biden by a reporter at the White House on Wednesday.

Biden didn’t answer as he walked away from the microphone.

But Bureau of Labor Statistics data announced Wednesday morning indicate Americans, indeed, should be concerned if they aren’t already.

Consumer prices in April spiked 4.2%, on a year-over-year basis, the biggest increase since November 2008. Economists expected a year-over-year reading of 3.6%.

The consumer price index, which measures a basket of goods as well as energy and housing costs, increased 0.8% from the prior month.

Bloomberg called it “a sign burgeoning demand is giving companies latitude to pass on higher costs.”

Excluding the volatile food and energy components, Bloomberg reported, the so-called core CPI rose 0.9% from March, the most since 1982.

Bloomberg’s Peter Coy summarized the causes: “Iron, copper, lumber, cotton, computer chips, and gasoline are jumping in price. The dollar has weakened, making imports more costly. Employers are having to raise wages to fill record openings; the federal government is spending heavily; and consumers emerging from the pandemic are in the mood to light some money on fire.”

Fox Business host Maria Bartiromo opined Wednesday in an interview with economist Stephen Moore about the new data that “bad policy equals bad outcomes.”

“I’m only surprised that Wall Street is surprised by this,” Moore said. “And I’m surprised that the Fed has been surprised by this.”

Moore said it boils down to basic economics.

“Inflation is too many dollars chasing too few goods, right, and that’s precisely what we have right now,” he said.

On the CNBC program “Squawk Box,” Hungarian-American billionaire Thomas Peterffy said he has serious concerns about what economic indicators portend for the coming year.

“I hear numbers like this I look back to my childhood growing up in Hungary where I was playing with billion-dollar bank notes. … The value of money meant nothing,” said Peterffy, the founder, chairman, and the largest shareholder of Interactive Brokers.

“So, I’m very worried that this is an unstoppable situation, because the longer the Fed waits, the more they will have to raise the rates,” he said.

At 3.75%, the annual debt service is going to be $1 trillion, Peterffy noted, “so we basically are painting ourselves into a  box, and I don’t see how we are going to get out of it.”

President Biden is proposing an additional $6 trillion in spending with the $1.9 trillion American Rescue Plan, the $2.3 trillion American Jobs Plan and the $1.8 trillion American Families Plan.

Sen. Rob Portman, R-Ohio, said the labor statistics are “exactly what you would have expected” as a result of Biden’s policies.

“The answer is, of course, not to raise taxes now, not to keep priming the pump, not to keep putting more money into circulation, but to allow this economy to grow in a steady way so we don’t have this spike in inflation, so we don’t have these higher interest rates, so we can get back to the kind of pre-COVID economy we had,” he said in an interview with Fox News’ Charles Payne.

The pre-COVID economy under President Trump, the senator said, was a “very inclusive economy where we had higher wages, particularly among lower and middle income workers.”

“We had the lowest poverty rate in the history of our country going back to the 1950s,” he noted.

“Things were going pretty well, people coming off the sidelines. Let’s get back to that.”

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