Inflation Hits Harder Than Biden Could Ever Imagine

Written By BlabberBuzz | Friday, 15 October 2021 12:00

U.S. consumer prices expanded solidly in September as Americans paid more for food, rent, and a range of other goods, putting pressure on the Biden administration to instantly relieve strained supply chains, which are hampering economic growth.

With prices likely to rise further in the months ahead after a recent surge in the costs of energy products, the report from the Labor Department on Wednesday could test Federal Reserve Chair Jerome Powell's repeated assertion that high inflation is transitory. Instead, Powell and the White House have blamed supply chain bottlenecks for the high inflation.

Rents Going Up

Rents are growing as demand for housing in cities rebounds after a pandemic-induced exodus to suburbs and other low-density locations. As a result, economists expect rents, which account for almost a third of the CPI, will be a significant source of inflation in the months ahead.

 WATCH: WHOOPI GOLDBERG SLAMS ALL MALES THAT DISCUSS ABORTIONbell_image

 WATCH: WHOOPI GOLDBERG SLAMS ALL MALES THAT DISCUSS ABORTIONbell_image

"If shelter prices continue to pick up steam, it could mean higher inflation is more baked in than originally thought," announced Will Compernolle, senior economist at FHN Financial in New York.

Food and rents accounted for more than half of the increase in the CPI. Economists surveyed by Reuters had forecast the overall CPI would rise 0.3%.

 JOHN EASTMAN ALREADY PLEAD THE FIFTH AHEAD OF JAN 6 COMMITTEE APPEARANCEbell_image

 JOHN EASTMAN ALREADY PLEAD THE FIFTH AHEAD OF JAN 6 COMMITTEE APPEARANCEbell_image

In the 12 months through September, the CPI rose 5.4% after advancing 5.3% on a year-on-year basis in August.

Worker Shortages Hit Supplies

Supply chains have been gummed up by robust demand as economies emerge from the COVID-19 pandemic, thanks to over $10 trillion in global economic stimulus, roughly half of it in the United States. The coronavirus pandemic has caused a global shortage of workers required to produce raw materials and move goods from factories to consumers.

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 NO CHOICE: UNIVERSITIES BANNING STUDENTS WHO DO NOT HAVE BOOSTERbell_image

President Joe Biden on Wednesday declared that the Port of Los Angeles would start working around the clock, after the Port of Long Beach's lead, to ease congestion. Retailers like Walmart Inc and shipping companies FedEx Corp and UPS also agreed to move goods 24 hours a day and seven days a week.

 MUST WATCH: BIDEN'S BEHAVIOR SHOWS JUST HOW LITTLE HE THINKS OF HIS OWN RULESbell_image

 MUST WATCH: BIDEN'S BEHAVIOR SHOWS JUST HOW LITTLE HE THINKS OF HIS OWN RULESbell_image

New Cars Are Pricier

The Consumer Price Index (CPI) climbed 0.2% after edging up 0.1% in August, excluding the volatile food and energy components. In addition to rents, the so-called core CPI was lifted by a 1.3% increase in the cost of new motor vehicles, which marked the fifth straight month of gains above 1%.

Fed concerned About 'Elevated Inflation'p>

 DEMS CHEER AS GAS PRICES GO DOWN 'PRACTICALLY NOTHING'bell_image

 DEMS CHEER AS GAS PRICES GO DOWN 'PRACTICALLY NOTHING'bell_image

Minutes of the Fed's Sept. 21-22 policy meeting, which were released on Wednesday, showed some U.S. central bank officials "expressed concerns that elevated rates of inflation could feed through into longer-term inflation expectations of households."

Fed officials signaled they could start reducing the central bank's massive bond-buying program in mid-November, the minutes showed.

Strong inflation, if persistent, could force the Fed to increase interest rates.

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