The price of living in America is completely unsustainable. Inflation soared in January by 7.5%, marking the fastest pace of price gains since February 1982 when the index reached 7.6%. Secretary Psaki attempted to do damage control the day before the report was released by stating that the White House would not be surprised if inflation came in over 7%, despite having no ideas or proposed solutions for controlling rapidly rising prices. Core prices jumped 6% last month YoY, outpacing December’s 5.5% reading when it reached the sharpest increase since August 1982.
Real hourly earnings rose 0.1% in January from the month prior. In fact, real earnings actually dropped by 1.7% last month. The White House touts wage gains but does not understand that inflation is far outpacing any notable gains and creating a wage-price spiral. Inflation has not been “transitory,” as Fed Chairman Powell decided to “retire” the use of the word after months of claiming the central bank’s 2% target was realistic under current conditions (see video below from November 30, 2021).
The Federal Reserve will have no choice but to raise months sooner than anticipated. The politicians in charge of the supply chain crisis have been unable to manage their responsibilities and actually exacerbated the problem. Numerous analysts anticipate inflation rising yet again in March, but runaway inflation needs to be reined in as the cost of living is unmaintainable.