By just about any measure, the economy is in terrible shape. There are several measures of inflation in data coming out of January that just aren’t good. New data out today continues to not only confirm that it’s not good but getting worse.
The producer price index is showing similar data to what we saw in last week’s reporting.
New York (CNN Business)America’s high prices didn’t budge in January. Another key inflation measure showed prices rising last month.
The producer price index, which tracks average price changes America’s producers get paid for their goods and services over time, rose 9.7% in the 12 months ended in January, not adjusted for seasonal swings, the Bureau of Labor Statistics reported Tuesday. That was far higher than economists had expected, albeit a 0.1 percentage point decrease from the revised series high set at the end of 2021.
For the month of January alone, prices rose 1%, adjusted for seasonal swings, dwarfing both the price increase from December and economists’ expectations. Forecasts had only been for a 0.5% price increase.
Stripping out food, energy and trade services, which tend to have more volatile price swings, the inflation gauge rose 0.9% in January, the biggest jump since January 2021. Over the 12-month period, core prices rose 6.9%, a 0.1 percentage point decline compared with December.
There does not appear to be any end in sight, either. American consumers are facing steep price hikes across the board, and there is no sign that inflation is slowing down. It’s got a lot of Democrats nervous, with Joe Manchin coming out to essentially say that the Build Back Better plan is dead and Nancy Pelosi doing her best to spin the situation away. But despite the spin, consumers aren’t fooled. Things are looking bleaker and bleaker.
The problem is that the Biden administration can’t really do anything substantial to reverse what’s happening. Legislation that flooded the economy with a bunch of extra money made things worse. Cutting jobs in the energy sector made things worse. Nothing they’ve done so far has made anything better.
Voters are keenly aware of what’s going on, too. This is something they feel. To dismiss it, as Pelosi did, only serves to infuriate them more. It’s a big reason both the House and Senate are in play, and why nearly six out of ten Americans disapprove of Biden’s job performance.
Unfortunately, things will continue to get worse before there is any hope of getting better. There isn’t a ceiling on inflation (or, at least, one we can see right now), and while the last jobs report was better than expected, there’s still the fact that inflation is outperforming job numbers and wage growth. The average American can’t get any relief.