Inflation Rate Highest in 40 Years

Prices rose 7 percent in December, the fastest inflation pace in 40 years.

Summary

The consumer-price index, the government measurement that tracks the prices of goods and services, increased 7 percent in December 2021 compared to December 2020. This is the fastest rate increase since June 1982.

• Supply chain entanglements, high consumer demand for goods (e.g. used cars) and pandemic-induced low demand for services all contribute to rising prices.
• Rising housing costs are a particular concern. Housing costs tend to remain high once they increase. This puts pressure on prospective homebuyers amid increasing demand for rental units and leases.
• High inflation is a challenge for Biden. The Biden Administration at first denied inflation was a concern. Then, they labeled it “temporary,” and now they blame corporations for price gouging.
• Even center-left economists think the Biden Administration’s conclusions are misguided.
• Lael Brainard, Biden’s nominee for Vice Chair of the Federal Reserve, plans to testify before Congress that cutting inflation is the Fed’s “most important task.”
• U.S. CEOs also expressed concern about the “inflation surge.”

• The New York Times’s Ezra Klein interviewed MSNBC’s Chris Hayes on inflation, low unemployment and rising wages, and what he views as the Biden Administration’s successes and failures on the economy.
• Politico covered how rising inflation threatens to kill Biden’s Build Back Better agenda after Fed Chair Powell called price spikes a “severe threat” to the economy.
• The Washington Post broke down four ways Americans are feeling inflation’s punch: food, gas, housing, and healthcare.

• National Review dives into the December inflation numbers and examines the options available for Federal Reserve Chairman Jerome Powell going forward to address high prices.
• The Wall Street Journal broke down the sectors where inflation rose in seven charts.
• Breitbart covered Sen. Elizabeth Warren (D-MA)’s “fact-free attack” on grocery store chains. Breitbart characterized Warren’s desire to blame grocery store chains instead of the Biden Administration “equal parts dishonest and stupid.”

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© Dominic Moore, 2022