Staff Reports
The economy is stuck in a never-ending cycle of rising prices as inflation continues to grip the country. Despite the Federal Reserve’s efforts to bring down inflation with rate hikes, the cost of goods and services rose 0.4 percent for the second consecutive month in September. This challenges the Fed’s claims that their actions are making a difference.
In fact, the personal consumption expenditure price index, which measures inflation, is up 3.4 percent over the past year. This level of inflation has remained unchanged since August, showing that the Fed’s efforts to cool down the economy are falling short. President Joe Biden promised to bring inflation down to two percent, but that goal seems far-fetched under the current circumstances.
The Commerce Department also reported that the economy grew at an annual pace of 4.9 percent, much faster than expected. This level of growth is inconsistent with falling inflation, contradicting the Fed’s stance on monetary policy. It’s hard to believe that the Fed’s rate hikes are having any real impact when the economy is booming and prices continue to rise.
Inflation has been a persistent problem for the past year. In June 2022, the PCE price index hit a high of 0.9 percent, the fastest rate of price gains since 2005. On a year-over-year basis, the index increased 7.1 percent, the worst inflation since 1981. While there was a slight respite earlier this year, with monthly price gains falling to 3.1 percent in February, the recent increase to 0.4 percent in August raises concerns that the Fed’s rate hikes might not be as effective as they claim.
But, but, but, Bidenomics is working. Maybe working for the elitists trying to drive our economy into the ground .
Prices Rise More Than Expected as Inflation‘s Grip on Economy Persists https://t.co/aQWpnk3Tv8 via @BreitbartNews
— PatriotSons (@Patriot_Sons) October 27, 2023
The core PCE price index, which excludes food and energy prices, rose 0.3 percent, the fastest rate of core price inflation since April. This increase aligns with previous expectations and shows that inflation is not only affecting basic necessities but is also spreading to other areas of the economy.
Despite these worrying trends, Fed officials are unlikely to raise interest rates at their next meeting. However, if inflation continues to rise at this rate, they may have no choice but to take action. It’s clear that the Fed’s projections for inflation to fall to two percent by 2025 or 2026 are unrealistic given the current circumstances.
The service sector has seen the biggest increase in prices, with a rise of 0.5 percent in September. This includes services excluding shelter and energy, a measure that is frequently cited by Fed chairman Jerome Powell and other officials as a key indicator of inflation. This “super core” measure is up 4.2 percent compared to a year ago, showing that inflation is hitting a wide range of industries.
Even goods prices, which were expected to fall as consumers shifted their spending towards services, increased by 0.2 percent. Food prices rose 0.3 percent and energy prices jumped 1.7 percent. While energy prices are slightly below the levels seen last summer, goods prices are still up 0.9 percent and food prices are up 2.7 percent compared to a year ago.
Overall, the rising prices and persistent inflation indicate that the Fed’s attempts to cool down the economy are falling short. If the current trends continue, it’s time for the Fed to consider more aggressive measures and address the root causes of inflation. The economy cannot thrive under these conditions, and it’s up to our leaders to take decisive action.
