Hey, did you guys notice prices went up this past year…on, like, everything?
Yeah, I know, that’s the stellar economic advice that I am paid to provide you, our loyal readers. You’re welcome!
The inflation of 2021 was like nothing we’ve seen since the early years of the Reagan administration.
And the Gipper wouldn’t be happy with Goldman Sachs’ latest note in which they predict that headline CPI will reach as high as 7% in the next few months.
The CPI rose 6.8% from a year ago, the fastest rate in nearly 40 years.
Core CPI—which excludes food and energy prices— rose 4.9% from a year ago, which is the largest increase since 1991.
Energy prices have risen 33.3% since November 2020 and increased 3.5% in November.
If you have been to a grocery store lately, you have undoubtedly noticed that prices have soared on goods ranging from meat to butter.
Grocery prices are up 6.4% from a year ago.
According to the Labor Department, meat prices are up 16% from a year ago. Beef prices are up 20.9%, pork prices have risen 16.8%, and bacon 21%. Chicken has risen 9.2%, and hamburger meat is up 13.9%.
And if you have been to a gas station anytime in the last year, it will come as no surprise to you that gas prices have climbed 58.1% in the past year.
Food prices at restaurants are also up 6.1% for the year.
“Prices for used cars and trucks have been among the biggest drivers of inflation in 2021, with costs soaring 31% over the last year. New vehicles have seen a smaller gain of 11%,” according to Business Insider.
According to the labor department, food and energy costs grew at the fastest one-year pace in 13 years, and shelter costs increased 3.8%, the highest rate since the housing crisis of 2007.
That’s right… the rent is too damn high!
The Federal Reserve has been proven wrong as well. The Fed previously claimed that inflation wouldn’t be severe and that it would be “transitory.”
Last month, speaking in front of Congress, Fed Chairman Jerome Powell finally admitted that inflation was indeed not transitory, and said that it was time to retire the word when describing current and future inflation.
Powell also added, “at this point, the economy is very strong, and inflationary pressures are high, and it is, therefore, appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at our November meeting, perhaps a few months sooner.”
According to the Wall Street Journal, “Sixty percent of small-business owners said they had increased prices in the previous 90 days, according to a November survey of more than 560 small businesses for The Wall Street Journal by Vistage Worldwide Inc., a business-coaching and peer-advisory firm. Eighty percent of the companies surveyed reported increased labor costs, while 72% said their suppliers had raised prices.”
So, welcome back, inflation. It’s been a while…but not long enough. Come 2022, feel free to leave again. Don’t let the door hit you on the butt on the way out!