Yes, The US Is Experiencing the Worst Inflation Since 1981 Under Biden

SAN ANGELO – Consumers in the United States are paying the highest prices for goods and services in decades under Biden administration policies and the worst is yet to come. 

The Bureau of Labor Statistics Wednesday released the latest Consumer Price Index Summary and its worse than predicted.  

The consumer price index, a broad measure of everyday goods and services related to the cost of living, soared 9.1% from a year ago, above the 8.8% Dow Jones estimate. That marked the fastest pace for inflation going back to November 1981.

Excluding volatile food and energy prices, so-called core CPI increased 5.9%, compared with the 5.7% estimate. Core inflation peaked at 6.5% in March and has been nudging down since.

The Consumer Price Index for all urban consumers increased 1.3% in June on a seasonally adjusted basis after rising 1.0% in May.  Over the last 12 months, the all items index increased 9.1% before seasonal adjustment.  

The increase was broad-based, with indexes for gasoline, shelter, and food being the largest contributors.  The energy index rose 7.5% over the month and contributed nearly half of the all items increase, with the gasoline index rising 11.2% and the other major component indexes also rising.  The food index rose 1.0% in June, as did the food at home index.

The index for all items less food and energy rose .7% in June, after increasing .6% in the preceding two months.  While most all major component indexes increased over the month, the largest contributors were in the indexes for shelter used cars and trucks, medical care, motor vehicle insurance, and new vehicles.  The indexes for motor vehicle repair, apparel, household furnishings and operations, and recreation also increased in June.  Among the few major component indexes to decline in June were lodging away from home and airline fares.  

The all items index increased 9.1% for the 12 months ending in June, the largest 12-month increase sine the period ending in November 1981.  The all items less food and energy index rose 5.9% over the last 12 months.  The energy index rose 41.6% over the last year, the largest 12-month increase since the period ending April 1980.  The food index increased 10.4% for the 12 months ending in June, the largest 12 month increase since the period ending February 1981. 

Policymakers have struggled to come up with answer to a situation that is rooted in multiple factors, including clogged supply chains, outsized demand for goods over services, and trillions of dollars in Covid related stimulus spending that has made consumers both flush with cash and confronted with the highest prices since the early days of the Reagan administration.