“The Party told you to reject the evidence of your eyes and ears. It was their final, most essential command.” — George Orwell, 1984
The official inflation rate has come down from its highs earlier in the Biden Administration, and the Democrats are arguing that inflation has been whipped, that wages are rising just as fast as prices, and even a little bit faster. But Erin McCarthy of The Philadelphia Inquirer wrote something that just doesn’t go along with the Democrats’ meme. Continue reading
It was September of 2016, and the Obama Administration was having none of the bad economic news. The economy was doing great, we were told, unemployment was way down as the economy recovered from the 2008-9 recession, and everything was peaches but the cream. Trouble is, the American people just didn’t quite believe it:
Problem: Most Americans don’t believe the unemployment rate is 5%
by Heather Long | September 6, 2016 | 3:18 PM EDT
Americans think the economy is in far worse shape than it is. The U.S. unemployment rate is only 4.9%, but 57% of Americans believe it’s a lot higher than that, according to a new survey by the John J. Heldrich Center for Workforce Development at Rutgers University.
The general public has “extremely little factual knowledge” about the job market and labor force, Rutgers found.
It’s another example of how experts on Wall Street and in Washington see the economy differently than the regular Joe. Many of the nation’s top economic experts say that America is “near full employment.” The unemployment rate has actually been at or below 5% for almost a year — millions of people have found jobs in what is the best period of hiring since the late 1990s.
But regular people appear to have their doubts about how healthy America’s employment picture is. Nearly a third of those survey by Rutgers believe unemployment is actually at 9%, or higher.
Republican candidate Donald Trump has tapped into this confusion. He has repeatedly called the official unemployment rate a “joke” and a even “hoax.”
As it happened, the U-6 unemployment rate — “Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.” — was in the nine percent range, 9.6% to be more precise, and if few people actually look at the various unemployment categories, the public can sort of feel them in their bones.
Well, the supposed good news is that the current ‘official’ unemployment rate has dropped to a multi-year low of 3.5% as the non-farm economy added 223,000 jobs in December. But, with the labor force participation rate still lower than before the disruptions caused by government reaction to the panicdemic — no, that’s not a typographical error, but exactly the spelling I believe it should have — the unemployment number is being held artificially low. The civilian labor force stood at 164,966,000 in December, just 262,000 higher than it was in December of 2019, the last pre-virus year, but the workforce-eligible population, those aged 16 and over, not in the military nor incarcerated, is 4,633,000 higher than in December of 2019, 264,814,000 vs 260,181,000.
When I say that the public feel it in their bones, I look at other indicators, and this story stood out for me:
Macy’s warns holiday-quarter sales will come in light, citing squeeze on shoppers’ wallets
by Melissa Repko | Friday, January 6 2023 | 4:33 PM EST | Updated Friday, January 6 2023 | 7:43 PM EST
Macy’s on Friday warned its holiday-quarter sales will come in on the lighter side, saying consumers’ budgets are under pressure and that it anticipates that squeeze to continue into this year.
The department store operator said net sales are now expected to be at the low- to midpoint of its previously expected range of $8.16 billion to $8.4 billion. It expects adjusted diluted earnings per share to be in the previously issued range of $1.47 to $1.67.
For the year-ago period, Macy’s reported revenue of $8.67 billion and adjusted earnings per share of $2.45.
Shares of the company fell about 4% in aftermarket trading Friday.
Macy’s is the latest retailer to provide clues about the consumer, as investors await holiday results and look for signs of whether demand is holding up as inflation remains high
There’s more at the original, and no, it isn’t behind a paywall.
So, Macy’s, a very-sensitive-to-Christmas retailer, is going to see an absolute drop in holiday revenue, yet the inflation rate in November — the December inflation figures are not out yet — was 7.1%. Macy’s has seen a total holiday revenue decline of roughly 5%, at a time when prices have increased 7.1%. And this was during the first real Christmas season in which people weren’t under mask mandates and the general malaise of the panicdemic.
There are real, solid reasons for this. The Bureau of Labor Statistics reported that average hourly earnings were 4.6% higher in December over December of 2021. That would be great . . . if the inflation rate hadn’t been much higher. The average American was poorer, in real terms, this Christmas than he was last Christmas. The Biden Administration doesn’t want people to know that, but the public can see it, can feel it, in their wallets and in their bones. And that’s why Macy’s saw a drop of revenue.
There’s more: we might not be in a recession now, but economists believe there will be one before 2023 is over:
Big banks are predicting that an economic downturn is fast approaching.
More than two-thirds of the economists at 23 large financial institutions that do business directly with the Federal Reserve are betting the U.S. will have a recession in 2023. Two others are predicting a recession in 2024.
The firms, known as primary dealers, are a collection of trading firms and investment banks that include companies such as Barclays PLC, Bank of America Corp., TD Securities and UBS Group AG. They cite a number of red flags: Americans are spending down their pandemic savings. The housing market is in decline, and banks are tightening their lending standards.
“We expect a downturn in global GDP growth in 2023, led by recessions in both the U.S. and the eurozone,” economists at BNP Paribas SA wrote in the bank’s 2023 outlook, titled “Steering Into Recession.”
The main culprit is the Federal Reserve, economists said, which has been raising rates for months to try to slow the economy and curb inflation. Though inflation has eased recently, it is still much higher than the Fed’s desired target.
The Fed raised rates seven times in 2022, pushing its benchmark from a range of 0% to 0.25% to the current 4.25% to 4.50%, a 15-year high. Officials signaled in December that they plan to keep raising rates to between 5% and 5.5% in 2023.
There’s more at the original, but it all boils down to one thing: if you’re wealthy, you’ll see some economic losses, but you’ll still be able to live. If you are living paycheck-to-paycheck, you’re in for some real pain.
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Also posted on American Free News Network. Check out American Free News Network for more well written and well reasoned conservative commentary.
You may have heard the supposedly good news: the year-over-year inflation rate declined to 7.1%:
Consumer prices rose last month at the slowest 12-month pace since December 2021, closing out a year in which inflation hit the highest level in four decades and challenged the Federal Reserve’s ability to keep the U.S. economy on track.
The Labor Department on Tuesday said that its consumer-price index, a measurement of what consumers pay for goods and services, climbed 7.1% in November from a year ago, down sharply from 7.7% in October. The pace built on a trend of moderating price increases since June’s 9.1% peak, but it remained well above the 2.1% average rate in the three years before the pandemic.
There’s a lot more in The Wall Street Journal’s original.
Of course, the inflation rate only makes sense when compared to earnings. According to the Bureau of Labor Statistics, Table B-3, average private sector hourly earnings increased from $31.23 in November of 2021 to $32.64, a 5.09% increase, while average weekly earnings moved from $1,086.80 to $1,129.01, which was only a 3.88% increase. Compared to hourly wages, the average American worker is 2.01% poorer, in real terms, than he was in November of 2021; compared to average weekly earnings, he’s 3.22% poorer.
That isn’t the whole story. From November of 2020 to November of 2021, Table B-3 Historical Tables, average wages increased from $29.95 to $31.23, a 4.27% increase, while average weekly earnings went from $1,031.82 to $1,086.80, a 5.33% rise. Remember: this was moving from a COVID-19 restricted economy to one where almost all of the restrictions had been removed. But the November 2021 year-over-year inflation rate was 6.8%.
So, not only was the average American worker 3.22% poorer in November of 2022 than he was a year earlier, that’s on top of being 1.47% poorer, in real terms, the previous year. Due to the compounding effect of the math, average consumer prices were 14.38% higher in November of 2022 than in November of 2020,[1]1.068 x 1.071 = 1.1438 while average weekly earnings were 9.42% higher. That’s a loss of real earning power of 4.96%.
I wonder how many of those 81,283,501 people who voted for Joe Biden in November of 2020 would have done so if they’d known they’d be five percent poorer in two years.
And it’s going to get worse:
The figures leave the Fed on track to lift interest rates by 0.5 percentage point on Wednesday, following larger increases of 0.75 point at their past four meetings.
So, while economists anticipate home prices to start to fall, as demand is lowered due to higher interest rates, that does not mean that rent prices will fall. If the demand for buying homes declines, the demand for rental property necessarily increases, and that means higher rents. Rent increases for existing tenants normally occur just once a year, but rental increases for people moving during the year can and do occur at any time.
In 1849, Scottish writer Thomas Carlyle called economics the dismal science, and in a lot of ways, he was right. Economic reduces things to numbers, and a lot of people don’t like that, but it doesn’t mean that the numbers aren’t true.
The numbers I gave were averages, and I’m sure that many of the 81,283,501 Biden voters have managed to weather the inflation of the past two years reasonably well. But for every Biden voter who hasn’t had a problem with inflation, there’s another who has had Bidenflation eat up more of his earnings than the average. For every Biden voter who hasn’t seen any appreciable loss of economic well-being, there’s another who is worse off than the already-depressing averages.
References
| ↑1 | 1.068 x 1.071 = 1.1438 |
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We noted, on September 19th, that President Joe Biden said that we should put things in perspective, that the “inflation rate, month-to-month, was up just an inch, hardly at all”, that we’re in the position where for the last several months it hasn’t spiked, “we’re basically even.”
Well, our distinguished President doesn’t have to worry about paying his heating bills this winter, but most Americans do:
A cheery fire in our wood stove in Jim Thorpe, December 18, 2016.
Here’s how much more you’ll pay to heat your home this winter
By Kelly Hayes | Tuesday, September 20, 2022 \ 11:41 AM EDT
Americans are likely going to pay more to heat their home over the winter months.
The average cost of heating a household is set to increase by 17.2% this winter, compared to winter last year, according to a forecast by the National Energy Assistance Directors Association (NEADA), an educational and policy organization for federal programs that help low-income families pay their utility bills.
The article was illustrated with a nice, stock photo of a cheerily burning wood fire in a nice, upscale home fireplace, but I figured that, using my own photo from our previous home, was wiser for copyright purposes. Alas! Mrs Pico absolutely vetoed a wood-burning stove in our current house, because she says they make too much of a mess, so, to supplement the heat, and be a backup for when the sparktricity goes out — something not that infrequent here, and can be for several days out here in the country — we installed a propane fireplace.
The group expects the average winter heating bill to increase from $1,025 to $1,202, which would be the highest figure in over a decade.
U.S. residential electric bills are also forecast to increase 7.5% from 2021, according to the U.S. Energy Information Administration’s latest short-term outlook.
There’s more at the original.
Gas fireplace in my computer room/den.
Let’s tell the truth here: for all of their protestations that they care about ordinary Americans, the Democrats really don’t understand us. The Washington elites have plenty of money, and the increases in energy costs simply don’t matter that much to them. Their proposals to fight global warming climate change will add thousands to people’s electricity bills, because so much new infrastructure will have to be built to support the greatly increased demand for electricity as people have to charge their Chevy Dolts at home. Phasing out reliable, fossil-fuel burning power plants and replacing them with solar and wind power generating facilities will cost big bucks.
By 2050, the US will demand nearly 90% more power than it did in 2018, in a scenario in which all new passenger vehicles sold by 2030 are electric and buildings and factories also aggressively electrify, according to an analysis by Nikit Abhyankar, a senior scientist at the Goldman School of Public Policy at the University of California, Berkeley.
Different scenarios will lead to a smaller increase in demand, but any changes which require more energy not from fossil fuels are going to lead to a huge increase in demand. Yet the projected increases in home heating costs are coming without any significant global warming climate change policies additions to current costs.
Perhaps President Biden doesn’t personally understand this, but his advisors certainly do, but that doesn’t matter: they just don’t care about what you have to pay, as long as they get their way.
We need Gerald Ford’s “Whip Inflation Now” buttons!
Inflation May Fall Slower Than Expected
by Chuck Jones | Monday, May 9, 2022 | 8:45 AM EDT
The rapid rise in inflation is causing the Federal Reserve to aggressively raise interest rates along with deleveraging its $8.9 trillion balance sheet. This has thrown stocks into correction territory or bear markets. Two of the major reasons for the increase in inflation have been the upsurge in demand coming out of the pandemic and supply chain issues.
April’s CPI estimate will be announced Wednesday before the stock markets open. Expectations are for the all items rate to drop from 8.5% to 8.1%. To hit 8.1% the month-to-month inflation rate will have to fall from 2.3% in January, 2.6% in February and 3.8% in March to no more than 1.25% to hit the expected number.
“Expectations,” were not met. Not only did the May inflation rate not drop to 8.1%, not only did it not even remain steady, but the rate rose slightly, to 8.6%.
Energy prices rose 32% on an annualized basis in March. In April Gasoline and Diesel prices were fairly flat, which will help lead to a lower inflation increase since they comprise about 4% of the inflation CPI Index and were up 48.2% year-over-year in March. However, natural gas prices increased in April, which will somewhat offset gasoline’s impact.
Well, guess what actually happened. From The Wall Street Journal:
U.S. Inflation Hits New Four-Decade High of 9.1%
Prices up broadly across the economy, with gasoline far outpacing other categories
by Gabriel T Rubin | Wednesday, July 13, 2022 | 12:08 PM EDT
U.S. consumer inflation rose last month from the year before at the highest rate in more than four decades, as prices climbed throughout the economy.
The consumer-price index rose 9.1% in the 12 months ended in June, the fastest pace since November 1981, the Labor Department said on Wednesday. The June increase also eclipsed May’s 8.6% rate, which led Federal Reserve officials to shift to a faster pace of benchmark interest-rate increases in its campaign to bring down inflation.
The report likely keeps the Fed on track to raise its benchmark interest rate by 0.75 percentage point at its meeting later this month. Stocks dropped and bond yields jumped following the inflation report.
Core prices, which exclude volatile food and energy components, increased by 5.9% in June from a year earlier, slightly less than May’s 6.0% gain, the Labor Department said.
There’s more at the original, but as I’ve asked before: why are “volatile food and energy components” excluded from the core inflation rate. Food and energy, in the form of gasoline and utility bills, have to be purchased every month, often several times a month. You see it when you fill your gasoline tank, and you see it when you go to the grocery store, and you see it when you get your electric and natural gas bills. Economics reporter for The New York Times noted that:
Gas prices rose 11.2% in June alone, and are up nearly 60% from a year earlier. Grocery prices were up 1% in June (a bit slower than in May) and were up 12.2% from a year earlier.
And:
One big reason “core” inflation accelerated in June: Rents rose 0.8% in June, the fastest one-month gain since 1986. “Owner’s equivalent rent,” the BLS’s (confusing) way of accounting for owner-occupied housing, is also picking up. Over the past three months, rents have risen at an annual rate of 8.2%. (Owner’s equivalent rent rising at 7.3% rate.) That’s especially worrying because rents don’t tend to turn around quickly.
You know what has happened? Virtually every single projection of the economic “experts,” or at least the great majority of them, has been wrong.
Back to the Journal:
Despite June’s inflation reading, economists point to recent developments that could subdue price pressures in the coming months.
Investor expectations of slowing economic growth world-wide have led to a decline in commodity prices in recent weeks, including for oil, copper, wheat and corn, after those prices rose sharply following the Russian invasion of Ukraine. Retailers have warned of the need to discount goods, especially apparel and home goods, that are out of sync with customer preferences as spending shifts to services and away from goods, and consumers spend down elevated savings.
“There’s a pretty serious recession fear affecting a broad range of asset prices,” said Laura Rosner-Warburton, senior economist at MacroPolicy Perspectives.
Retailers’ ability to shed unwanted inventory could test whether pricing is returning to prepandemic patterns, Ms. Rosner-Warburton said. Some retailers, such as Target, have already said they are planning big discounts. Others with robust warehouse capacity, such as Walmart Inc., could be more likely to hold on to their excess inventory, analysts say.
The first guesstimate of second quarter Gross Domestic Product figures is scheduled to be released on Thursday, July 28th, with a second, supposedly more refined guesstimate on THursday, August 25th. GDP decreased by 1.6% in the first quarter — the initial guesstimate was -1.4% — so if the figures show any negative reading at all, we will officially be in a recession. The second quarter already being over, there’s no time to change things.
I’m old enough to remember the last heavy inflation cycle, 1974-1982, and, after years of President Ford’s Whip Inflation Now buttons, and President Carter’s “malaise,” inflation was tamed the old-fashioned way: with a deep recession.
This isn’t 1982: inflation is not (yet) being accompanied by serious unemployment, but that’s in part due to people who should be working or looking for jobs still being paid, with phony money, not to work.
I’m not some fancy economics professional, and don’t have a PhD to my name. BUt it seems to me that things are going to get worse before they get better. The fer-mongers are attempting to scare us with dire warnings about the BA.5 Omicron sub-variant, and while those warnings are not being taken too seriously by the public in general, there’s at least the possibility that the warnings will be reasonably accurate. The Fed has been raising interest rates in an attempt to depress consumer demand, to fight inflation, but if they foul that up, such interest rate hikes could hasten a recession. Ukraine, the breadbasket of Europe, has seen its wheat crop and exports devastated by the war, and the economic restrictions put on Russian gas and oil, though they haven’t hurt Russia yet, could really mess things up in Europe, especially when winter arrives.
My wife is more worried about the economy than I am, and she’s pretty smart — smart enough to have married me, anyway! — but I am concerned enough. Perhaps it’s unfair to place all of the blame on President Biden, but hey, you know that he’ll take the credit for any good news; we might as well lay the responsibility for bad news at his stinky feet.
“I was wrong” is not something you expect to hear from an economist. When they are wrong, economists are far more likely to push the reason for them being wrong onto things totally unforeseeable, or Donald Trump, or bad data coming from outside sources. Well, last Thursday, an economist admitted that he, and others, got things way, way wrong!
What economists like me got wrong about inflation
Predicting an end to inflation now comes down to three factors: the pandemic, Russia’s war in Ukraine, and decisions by the Federal Reserve.
by Mark Zandi | Thursday, June 23, 2022
If you are like most Americans, your number-one financial problem these days is runaway inflation. You’re desperate to know when inflation will peak, and when it will be back down to a level you can live with.
The economic pain and suffering caused by more than a year of spiking in inflation — which has dramatically raised prices on everyday goods and services — has been tough to bear. The typical family must shell out $460 more a month to buy the same items and services they bought a year ago — a huge bite out of that family’s $70,000 in annual income. For lower-income households living paycheck to paycheck, this is unmanageable.
Prices are up a lot for almost everything, but most disconcerting are the big price increases for basic staples. The nationwide cost of gasoline has soared to a record near $5 per gallon, nearly all items on grocery store shelves have suddenly become much more expensive, and rents are increasing at a double-digit pace.
I’ll admit it: it was so gratifying to see the “We were wrong” subtitle that I just had to screen capture it!
Many of us have never seen this kind of inflation before, making it especially difficult to fathom. The last time inflation was so high was two generations ago when Ronald Reagan was president. And it comes on the heels of more than a decade of inflation so low that the Federal Reserve, whose job it is to manage inflation, worried it was too low for the economy’s own good.
Also irksome is how wrong the Fed, the Biden administration, and economists, including me, were in thinking that the high inflation would quickly recede. It hasn’t.
I’m old enough that I have seen inflation this high, and much higher, from the last year under Gerald Ford, — and yes, I remember President Ford’s “Whip Inflation Now” buttons — all through Jimmy Carter’s abysmal presidency, and into the first year of the Reagan Administration. I also remember what finally did ‘whip’ inflation: a deep recession in 1981 and 1982.
Mr Zandi continued to blame the COVID-19 panicdemic, and he’s right, but he’s also wrong. It was the response by governments, in the United States and around the world, to the virus that fried the economy. He blames workers continuing to stay home, having dropped out of the economy because they are afraid of the virus, but that fear was driven by governments’ messages of panic. Even now the message is being spread, at least by the media, that there are new sub-variants of the Xi Omicron variant, which “appear to escape antibody responses among both people who had previous Covid-19 infection and those who have been fully vaccinated and boosted.” That, coupled with the unprecedented government largess with borrowed money, have worked to keep people who should be working out of the job market. It isn’t as though serious inflation wasn’t predicted due to the government borrowing so much money! Production and supply chain disruptions caused by people not being on the job, and they are not on the job because the government has enabled them to survive without working, has to lead to inflation: they have money to spend, but fewer things on which to spend it, which drives up prices; the laws of supply and demand are not subject to government revision!
Naturally, Vladimir Putin has to be blamed, for invading Ukraine. The European Union decided to stop buying oil from Russia, which meant that they had to buy it elsewhere, putting a large increase in demand on the remaining supply. Despite the pleas of the global warming climate change emergency activists, people need fossil fuels now, to the point where very, very green Germany is going to reopen coal fired power plants to meet electricity demands.
Of course, Europe also needs natural gas, so the energy companies have found a fig leaf of cover to keep buying gas from Vladimir Vladimirovich! Soviet Russian troops in Ukraine is far less important than keeping the lights on in Europe! Remember: we told you that even before the invasion.
Also see: William Teach: Biden Minions To Travel Around Country Telling People What Biden’s Doing On Inflation
In 1980, the average price of 87 octane regular gasoline in the United States was $1.19 per gallon. Using this inflation calculator, gasoline should have cost $3.74 per gallon in 2020, but it was $2.17 per gallon, and had, on April 27, 2020, dipped to $1.77.
The same inflation calculator puts that 1980 price at $4.22 per gallon now, but that includes the inflation caused by oil price increases itself, so is of somewhat limited value. Nevertheless, regular gasoline prices, while somewhat higher than $4.22 per gallon right now, are not extraordinarily higher; they’re still in the $4.00 to $5.00 range, albeit higher in that range. At the station closest to me, regular gasoline id $4.56 per gallon, having come down from $4.80 a couple of weeks ago.
Mr Zandi, having admitted that he, and many others, were wrong, now gives us a new projection:
So, what does all of that mean? It means that governments have to abandon their idiotic responses to COVID-19, and let us just live with it, which is what most of us in the United States have already done. I did notice that, in the Tour de Suisse bike race, the Swiss had abandoned the face masks that I had seen in the Giro d’Italia. The riders don’t wear masks while competing, of course, but previously everyone was masking up at the celebrations at the ends of each stage.[1]These European bike races are our vicarious vacations, enjoying the scenery even if we can’t be there. The Tour of Norway was particularly spectacular.
It means that, sorry to say it, Russia must carry on and win its war against Ukraine in some acceptable fashion, without the United States and NATO doing something to intervene more thoroughly and prolong, and perhaps intensify, the war. Russian oil and natural gas must come to back to the market and the ‘normal’ order of things be restored.
And it means that the Federal Reserve has to get everything right. Anyone here want to bet €10 on that?
Inflation will be whipped the same way it was in 1982, by a significant recession. The economy already contracted 1.4% in the first quarter of this year; if it contracts again in the second quarter, which ends this month, we will officially be in a recession . . . again.
References
| ↑1 | These European bike races are our vicarious vacations, enjoying the scenery even if we can’t be there. The Tour of Norway was particularly spectacular. |
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The inflation numbers are out, and they’re ugly!
We have previously noted the January, 7.5%, and February, 7.9%, year-over-year inflation rates, and the March figure was released this morning.
8.5%.
From The Wall Street Journal:
by Gwynn Guilford | Tuesday, April 12, 2022 | 8:45 AM EDT
U.S. inflation rose to a new four-decade peak of 8.5% in March from the same month a year ago, driven by skyrocketing energy and food costs, supply constraints and strong consumer demand.
The Labor Department on Tuesday said the consumer-price index—which measures what consumers pay for goods and services—in March rose at its fastest annual pace since December 1981, when it was on a recession-induced downswing after the Federal Reserve aggressively tightened monetary policy. That marks the sixth straight month for inflation above 6% and put it above February’s 7.9% annual rate–well above the Federal Reserve’s target.
The so-called core price index, which excludes the often-volatile categories of food and energy, increased 6.5% in March from a year earlier—up from February’s 6.4% rise, and sharpest 12-month rise since August 1982.
On a monthly basis, the CPI accelerated at a seasonally adjusted 1.2% last month, from 0.8% in February, and the fastest one-month increase since 2005.
I understand that government bureaucrats don’t like dealing with “often-volatile” data, but I have yet to understand why “the often-volatile categories of food and energy” are excluded from the core CPI; it’s not as though consumers don’t have to pay for food and energy, every single month.
How often do you buy a refrigerator or a washing machine? How often do you buy even small appliances like toasters or kitchen blenders? Not often, I’d guess, but we’ve been to Kroger a few times already this month.
After several paragraphs telling us why prices are increasing so fast, we get to this:
Which led to this:
Still, wages for most are growing too slowly to offset inflation. This could push workers to demand higher wages, creating a feedback loop that puts upward pressure on inflation.
When inflation is at 8.5%, while annual wage growth was 6.0%, consumers have become automatically poorer in real terms, 2.5% poorer. But hey, this is for what 81,268,924 Americans voted!
Inflation is more than a story of gas prices…
Groceries +10% –> biggest spike since 1981
Meat/poultry/fish +13.8% ->biggest since 1979
New cars 12.6%->biggest ever
Electricity +11.1% -> biggest since '06
Home furnishing 10.8% ->biggest ever
Rent 5.1% ->largest since 1991— Heather Long (@byHeatherLong) April 12, 2022
Photo at closest gas station to my house, taken on February 2, 2022.
Photo at closest gas station to my house, taken on February 25, 2022.
Earlier on Friday, I saw the price up to $3.699, and took a photo, at the Kroger on Bypass Road in Richmond, Kentucky, and tweeted it out. But, in the interest of journalistic integrity — whatever that is! — I thought that I ought to check at the same station as I had for the other two photos, and yup, sure enough, it was $3.699 there as well.
The math is simple: $3.699, up from $3.199, 56¢ per gallon, in just thirty days, is a 17.84% increase. That’s not the inflation rate, which is normally figured out by month, year-over-year, but a 17.84% increase in a month! Even if gasoline stayed absolutely flat until February of 2023, that would be a 17.84% increase in fuel year-over-year. With the Russian invasion of Ukraine, does anyone here think that gasoline prices will remain flat?
Look what has happened to inflation since January of 2021, which is when President Donald Trump left office, and Joe Biden replaced him. Inflation had skyrocketed well before the Soviet Russian invasion of Ukraine, well before Vladimir Putin had even hinted that such might happen. The year-over-year inflation rate was 6.2% in October of 2021.
Photo at closest gas station to my house, taken on March 4, 2022.
Of course, very few people actually want zero-emission vehicles, which means plug-in electric cars, at least they don’t want them enough to buy them. In 2020, the plug-in electric vehicle market was 1.8% of all new car sales. In 2021, the total electric vehicle market in the United States was 4%, but that includes hybrids as well as plug-in only.
But if the price of gasoline skyrockets, the left can hope that the increased gasoline costs will drive more people to buy plug-in electrics!
The February inflation numbers are scheduled to be released on Thursday, March 10th; it’s difficult to imagine that they wouldn’t be worse than January’s. The Federal Reserve had been contemplating raising interest rates, to cool down the economy, to tamp down inflation, but if inflation continues the way it has been going, the Fed won’t be increasing interest rates, the ‘invisible hand’ of the free market will do that.
We recently reported on the price of a gallon of milk in the Bluegrass State, and how it had increased 121.21% since President Trump left office. Grocery prices in general have risen. We also noted that January inflation, year-over-year, rose 7.5%, which was higher than the average hourly wage increase of 5.7%. Two days ago, I tweeted that regular gasoline had jumped 20¢ per gallon.
Now comes The Philadelphia Inquirer:
Utility bills are soaring in the Philly region and so is customer outrage
Peco gas bills are up 38% from last year. PGW’s are up 17%. “I have never paid this much for heat in the winter.”
by Andrew Maykuth | Sunday, February 27, 2022
Byron Goldstein closely monitors the energy usage at his Glenside home. So when he got a $651 bill from Peco Energy for combined electric and gas usage in January, 37% more than the $477 he paid the previous January, he knew something was off.Also see: Pa. electricity prices will be rising by as much as 50% this week. Here’s how you can save.
Goldstein discovered that Peco’s gas supply charge skyrocketed since January 2021, accounting for most of the increase. Goldstein, 74, was unsatisfied by the company’s response to his phone calls, so he filed a formal complaint to the Pennsylvania Public Utility Commission, urging the state regulator to roll back Peco’s “outrageous and irresponsible” price increase.
He was not alone. Across the Philadelphia area, thousands of utility customers opened their bills in recent weeks to learn that the cost of heating their homes had soared much more than the 7% inflation rate. Social media platforms lit up with posts from unhappy customers, directing their wrath at energy companies, regulators, and politicians.
“I have never paid this much for heat in the winter,” wrote a Philadelphia resident posting on Nextdoor.com, where several threads contained hundreds of comments venting about the price increase.
There’s more at the original, but it needs to be noted: these price increases came before the Russian invasion of Ukraine.
According to charts in the Inquirer original, natural; gas prices are actually significantly lower now than they were in 2008, but they’ve jumped significantly this winter:
The price has indeed gone up: A typical Peco customer who used 150 hundred cubic feet (ccf) of gas was billed $171.25 in January, up 38% or $46.90 from January 2021, according to PUC data. A Philadelphia Gas Works customer who used the same amount of gas was billed $261.71 in January, up 17% or $37.91 from a year ago.
Electricity bills also went up in Pennsylvania on Dec. 1, though not as much as gas bills.
With price increases like these, just how real does that reported 7.5% inflation rate feel?
The Inquirer reported, last December, that cable television and internet service rates from Comcast have increased, as have prices from AT&T and SlingTV.
The Wall Street Journal reported that NBC had a 42% drop in viewership for the 2022 Winter Olympics in Beijing, compared to the 2018 games in Pyeongchang, South Korea, something I attribute to NBC’s ‘free’ coverage being dominated by curling and other lower-interest events, while the events people are most interested in, ice skating and Alpine skiing, were being shown more often on Peacock, an internet streaming service which, naturally, has a subscriber fee. That’s just more money out of people’s pockets, or they miss out, a form of inflation that goes unaccounted.
The obvious question, at least to me, is: if inflation was ‘only’ 7.5%, what items went up less than that to counterbalance those which increased more?
