Late last year, US President Joe Biden and his administration made a bold prediction: That the inflation they were experiencing was “transitory”, and may even dissipate by December of 2021.
Spoiler alert: It wasn’t and it didn’t, and now Americans are paying the price for the White House’s lax response to this very real economic crisis.
The fiscal fracas has gotten so bad, in fact, that inflation continued to rise in August despite significant drops in gas prices – normally a key indicator of economic health trends.
Inflation rose more than expected in August as rising shelter and food costs offset a drop in gas prices, the Bureau of Labor Statistics reported Tuesday.
The consumer price index, which tracks a broad swath of goods and services, increased 0.1% for the month and 8.3% over the past year. Excluding volatile food and energy costs, CPI rose 0.6% from July and 6.3% from the same month in 2021.
And that wasn’t all:
Economists had been expecting headline inflation to fall 0.1% and core to increase 0.3%, according to Dow Jones estimates. The respective year-over-year forecasts were for 8% and 6% gains.
Energy prices fell 5% for the month, led by a 10.6% slide in the gasoline index. However, those declines were offset by increases elsewhere.
The food index increased 0.8% in August and shelter costs, which make up about one-third of the weighting in the CPI, jumped 0.7% and are up 6.2% from a year ago.
Medical care services also showed a big gain, rising 0.8% on the month and up 5.6% from August 2021. New vehicle prices also climbed, increasing 0.8% though used vehicles fell 0.1%.
The news spooked the stock market as well, with the DOW Jones taken a rather sizable hit in early trading on Tuesday.
