Consumer price index data due out this week will show soaring U.S. inflation hit another four-decade high last month even as President Joe Biden claimed rising prices are more to do with malevolent outside forces than his own economic (mis)management.
The Financial Times (FT) forecasts consumer price index data available from Thursday will show a rise of 8.4 per cent year over the past 12 months based on estimates from Bloomberg, the fastest pace since 1981.
That grim news comes just days after Harvard Professor, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton, Larry Summers, said recession risks also “are going way up” and he would put the odds of a recession in the next two years at above two-thirds.
He based that on the fact there hasn’t been a time in American history where inflation was over four percent with an unemployment rate below four percent where there wasn’t a recession within two years.
While the surge in U.S. consumer prices keeps accelerating it looks like the Biden administration still lacks the means – and the political will – to tackle headline inflation. The FT explains:
The gap between headline and core CPI points to a growing problem for the Federal Reserve.
Inflation produced by supply chain bottlenecks or sanctions on Russia is not within the Fed’s direct control, but will nevertheless produce a higher headline number. That could prompt calls for evermore aggressive policy.
The FT states the rate of U.S. price growth is up from 7.9 per cent in February, when the Ukraine conflict was just beginning.
Since then, prices of commodities have risen, with Brent crude, the international oil benchmark, peaking at its highest level since 2008.
While oil prices have backed off since that high, they remain elevated, pushing up consumer prices, as noted in the FT report.
While the rise will be bad for consumers it will be political poison for President Joe Biden who has already said he is “sick” of Americans blaming him for inflation instead of the coronavirus pandemic or Russian President Vladimir Putin, as Breitbart News reported.
The president is suffering from terrible ratings on the economy due to his failure to address inflation.
Sixty-three percent of Americans disapprove of the president’s handling of the issue of inflation and rising prices, according to a recent poll, including 54 percent who strongly disapprove.
Even as Biden says it is not his fault, ex-Democrat officials point to the president’s reckless spending agenda, as well as the Federal Reserves’ policies, driving an overstimulated economy and spiking inflation.
For most Americans that cost is immediately apparent at the gas pump.
A gas pump displays current fuel prices, along with a sticker of U.S. President Joe Biden, at a gas station in Arlington, Virginia, on March 16, 2022. (SAUL LOEB/AFP via Getty Images)
Former Treasury Secretary for Barack Obama Larry Summers told the Harvard Gazette in an interview last month government intervention in the economy is partially responsible for inflation, suggesting it was an overreaction to the coronavirus pandemic.
“We had an economy where income was running short by $50 billion a month because of the pandemic, and we injected $150 billion to $200 billion a month into that economy,” he wrote.