Real cost of inflation

Real cost of inflation to average American household: An extra $175 a month

October 6, 2021 10:44pm

This is a tax you pay for Biden and Dems’ reckless spending ](The Post says: This is a tax you pay for Biden and Dems’ reckless spending)

Over the past couple of months, Allison, a wife and mother of a toddler and teenager in Chicago, says she’s been spending about $50 more each week on groceries to feed her family — and that’s at a discount supermarket chain, Aldi’s.

“I used to spend $70 a week, but all of sudden this summer, I noticed that I couldn’t leave the store without spending at least $120,” said Allison, who works in education.

Like millions of Americans whose income has not kept pace with inflationup 5.3 percent in August compared with a year ago — Allison and her family are feeling the pinch of the rising cost of living and giving up some things just to make ends meet.

Her family is scrimping now. “There are no more splurges like going to Home Depot to buy an extra plant or eating out,” Allison said.

Inflation has spiked in the US

Spurred by supply shortages and massive government spending, inflation has become an added tax on middle-class Americans coming out of the COVID lockdowns.

For households earning the US median annual income of about $70,000, the current inflation rate has forced them to spend another $175 a month on food, fuel and housing, according to Mark Zandi, chief economist at Moody’s Analytics.

A lot of people have not seen their incomes keep up with rising inflation in the US.

“That’s the equivalent of a full grocery, electric or cellphone bill,” Zandi said.

Although government officials have called the inflation “transitory,” it’s running at a 30-year high, and has been for months.

Unpredictable supply-chain issues, including a record number of more than 70 cargo ships waiting to dock at the Port of Los Angeles, have made it difficult to predict when prices will stabilize.

To make matters worse, a trucker shortage has exacerbated the situation and shows no signs of abating. Everything from wood to electronics is becoming scarcer and more expensive.

Many consumer experts do not see any immediate relief in sight — with some bracing for a surge in credit-card debt. During the pandemic, many consumers had paid down debt because they were spending less while collecting larger unemployment checks.

Americans have seen everyday grocery items rise in price over the last year.

Dozens of cargo vessels are seen anchored offshore, sharing space with about a half dozen oil platforms, before heading into the Los Angeles-Long Beach port on Oct. 5, 2021.

But since April, credit-card balances and delinquency rates have been ticking up after decelerating for most of the pandemic, according to Zandi. Delinquencies are 1.54 percent as of Sept. 21, compared with 1.30 percent on April 21.

“Price increases will continue until the middle of next year,” predicted Gordon Haskett analyst Chuck Grom, pointing to a PepsiCo announcement this week that consumers can expect another round of price hikes in early 2022 on the company’s snacks and beverages.

Indeed, a 10-ounce bag of Lay’s potato chips — Frito-Lay is owned by PepsiCo — cost $3.75 in August, 50 cents more than a year earlier at Dollar General stores in the Southwest, Grom said.

Pepsi has already warned of more price hikes in 2022.

The prices of other items have also ratcheted up at the discount chain, including a dozen 12-ounce Coca-Cola cans that cost $5.75 in August — 50 cents more than in 2020 — at its Southwest stores, and a half a gallon of 2 percent store-brand milk that now costs $4.49, 74 cents more than a year earlier, according to Grom. At Family Dollar stores in the Northeast, the 12-pack of Coke cost $6.90 in August, up $1.50, and a can of Folger’s coffee costs 85 cents more, $8.80, he found.

In the Big Apple, grocery chains Gristedes and D’Agostino’s have increased prices by as much as 15 percent on chicken wings and beef, 10 percent on milk and 5 percent on eggs, while non-food related items have gone up by about 10 percent, according to owner John Catsimatidis.

What’s more, some consumers are reporting that it has become more difficult to cover their usual expenses.

Gristedes is among the stores that have had to increase prices on certain products.

The number of US households that report that it is “very difficult” to pay for their usual expenses has increased by 8 percent since early August, to 26.5 million, according to the Oct. 6 Census Bureau’s Household Pulse Survey.

Allison recently reached out to a debt-relief attorney, Leslie Tayne, to help her consolidate and lower her outstanding debt, which includes a hefty student loan.

“My business has exploded,” Tayne told The Post.

Biden likes to argue that the tax increases to pay for all this spending will hit only the rich. But inflation is a tax, a merciless one that’s already hitting Americans hard.

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Yet more inflation on the way.

Gas Prices Hit 7-Year High

SAN RAFAEL, CALIFORNIA - OCTOBER 05: Gas prices approaching $5 a gallon are displayed in front of a Circle K gas station on October 05, 2021 in San Rafael, California. Gas prices in the U.S. are continuing to rise to the highest level since 2014. According to AAA, the national average for a gallon of regular unleaded gasoline inched up to $3.20 over the last month, over $1 per gallon more than one year ago. (Photo by Justin Sullivan/Getty Images)

Cole Carnick • October 6, 2021 5:35 pm

Gas prices have reached a seven-year high, skyrocketing nearly 50 percent over the last year.

The national average price of gas on Wednesday hit $3.22, according to AAA, up from $2.18 just a year ago. The spike comes as oil prices have surged in recent weeks to their highest level since 2018. Analysts say the elevated energy prices can be attributed to a global shortage of natural gas, which has heightened demand for alternative fuel sources such as oil.

The increase in energy prices has worsened the economy’s inflation, which is at a 13-year high. The price of energy commodities climbed nearly 42 percent over the last year, the Labor Department reported last month.

The Biden administration has faced criticism for the country’s surge in energy costs. During his first days in office, President Joe Biden banned new natural gas and oil permits on federal lands and blocked construction of the Keystone XL oil pipeline, which would have expanded the U.S. oil supply. Nearly 80 percent of voters blame the president for the country’s inflation hike, accordingto an August Fox News poll.

Some analysts warn energy prices will push inflation even higher in the winter months, when demand for fuel increases.

"I am actually getting quite concerned as we head into winter … we could see a very sharp spike in energy prices into the last quarter," Jeffrey Halley, senior market analyst at OANDA Asia Pacific Pte., told Bloomberg last month. "That may feed through into ever more inflation."

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There is no limit on the size of US government debt, so long as the market is willing to buy it.

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You are an idiot. Printing money and hoping the dollar gets stronger doesn’t work and printing money and hoping the economy gets stronger isn’t working.

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So they will go with the 1 trillion dollar COIN :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl:

Some Democrats think they may have found a ‘silver bullet’ in the ongoing impasse over the [debt limit] except the bullet is made of platinum.
Left-wing radicals have proposed minting a $1 trillion coin and using it to flood the treasury with cash. :rofl: :rofl: :rofl: :rofl:

We have officially become a third world country. This is some Africa-tier bullshit.

That my friend started Jan 1 , 2020 . We are now importing morons with 2nd grade education along with their 8 kids we must pay $300 a month until 21 years of age . :nauseated_face:

The market is no longer willing to buy all our debt.

The Federal reserve has over 8 trillion in US debt today from the excessive spending.

What your MSM fails to tell you.

The Bureau of Economic Analysis reported year-on-year inflation of 4.3 percent for August. The annual rate of inflation was 4.2 percent in July, up from 4.0 percent in May and June. It is tempting to conclude from this that inflation is currently above the Federal Reserve’s 2 percent target. But that, it turns out, is not as easy to determine as one might think.

In August 2020, the Fed officially adopted an average inflation target. Rather than aiming for 2 percent inflation in any one period, the Fed declared, it would aim for inflation to average 2 percent over time.

The Fed’s Statement on Longer-Run Goals and Monetary Policy Strategy describes the new approach as follows:

The Committee reaffirms its judgment that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the Federal Reserve’s statutory mandate. The Committee judges that longer-term inflation expectations that are well anchored at 2 percent foster price stability and moderate long-term interest rates and enhance the Committee’s ability to promote maximum employment in the face of significant economic disturbances. In order to anchor longer-term inflation expectations at this level, the Committee seeks to achieve inflation that averages 2 percent over time, and therefore judges that, following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.

Inflation above 2 percent, therefore, might not indicate that inflation is above the Fed’s target. Instead, one must determine whether the average rate of inflation is above 2 percent.

That, too, it turns out, is not so straightforward. It is easy to take an average, of course. But the Fed has not indicated the time period over which it aims to achieve an average rate of inflation equal to 2 percent. Is the Fed averaging inflation over one year? Two years? Five years? Is this period constant? Or, does it change based on the type or magnitude of the economic shock? The Fed doesn’t say.

Whether the Fed is above or below target at present depends crucially on when you start the 2 percent projection. Suppose one starts the projection in January 2020, just prior to the pandemic. A 2 percent average rate of growth over the 19 months since then means the price level should be 3.2 percent higher today than it was in January 2020. In fact, it is 4.8 percent higher. This would suggest that inflation is currently 1.6 percentage points above target.

Suppose, instead, that one sets the projection in January 2016, when the Fed revised its Statement on Longer-Run Goals and Monetary Policy Strategy to clarify that its inflation target was symmetric. A 2 percent average rate of growth over the 67 months since then means the price level should be 11.7 percent higher today than it was in January 2016. In fact, it is 12.6 percent higher. This would suggest that inflation is currently 0.9 percentage points above target.

Finally, suppose that we set the projection in January 2012, when the Fed officially adopted a 2 percent inflation target. A 2 percent average rate of growth over the 115 months since then means the price level should be 20.9 percent higher today than it was in January 2012. In fact, it is 17.1 percent higher. This would suggest that inflation is currently 3.8 percentage points below target.

This exercise demonstrates one significant problem with the Fed’s average inflation targeting regime: the target is not clearly specified.

The average inflation target is intended to anchor inflation expectations. Since we do not know the period over which the Fed aims to see inflation average 2 percent, it is difficult to determine whether its current actions are consistent with its stated objective. As a consequence, we do not know whether to believe that the Fed is credibly committed to its target, or that it has drifted away from its stated goal.

The relevant macroeconomic question, however, is not whether the price level is above or below the Fed’s target. Rather, it is whether the price level is above or below the relevant expected price level when long-term production decisions were made. A credible Fed would anchor expectations to its target growth path. Unfortunately, the Fed has not been credible in the past.

That reality leaves us with a much more difficult policy question today: what should the Fed do when it hasn’t done what it should have done?

Committing to a target price level growth path projected all the way back from January 2012 or January 2016 would show that the Fed now takes its target very seriously. However, it would also require monetary policy to deliver a price level that is much higher than was expected when the decisions relating to current production were made. Such a policy would probably encourage an unsustainable boom in production, which might end with a painful recession.

A more reasonable approach, I would argue, is to target a growth path from January 2020, just prior to the pandemic. Everyone recognizes that the pandemic was incredibly disruptive. That makes it easy to communicate anchoring on a projected price level growth path beginning in January 2020. The Fed could bill it as a return to the pre-pandemic normal.

Of course, anchoring on a projected price level growth path from January 2020 would also require monetary policy to deliver a price level that is higher than was expected at the time. (The Fed had systematically undershot its two percent target in the preceding years, and markets came to expect it would continue to do so.) But the gap between the target and what was expected is much smaller than those associated with projections from January 2012 or 2016. The cost of anchoring on a projected price level growth path from January 2020, therefore, would be smaller than the cost required by projections from the earlier dates. The Fed would signal that it is committed to hitting a 2-percent growth path going forward. But it would do so at a relatively low cost.

It is difficult to say whether inflation is above the Fed’s target today since the Fed has not clearly specified what it is targeting. We know that it intends for inflation to average 2 percent over some period of time, but we do not know how long that period of time will be. A better monetary rule would more clearly indicate the target in each period. Such a rule would more effectively anchor expectations over shorter periods of time and enable the public and elected officials to assess the Fed’s performance.

The government needs to stop spending money they don’t have instead of just raising the debt ceiling.

Why can’t Biden offer a incentive to go back to work, after 2000 hours you get a 500 check. Help with sign on bonus. Give tax breaks… Democrats just want us all on welfare

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What’s hillarious is the op ATTEMPTING to blame Biden for reckless spending when it was the Trump budget that Biden’s been on his whole presidency until October 1st. It was trump that signed RECORD budget deficits and in a single Trump term the national debt that that phat ass promised to pay off, increased 7 phucking trillion…. SO, Phuck the notion that only democrats spend recklessly……:roll_eyes:

Same old hypocritical bullshit that never ends….


Biden wants to expand government, with guaranteed pensions…

Huge difference

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LOL! You have TDS seriously bad. This country has gone to hell in a handbasket in 10 months under Biden. BIDEN… not TRUMP.

This administration is the worst ever. Tell yourself what ever you need to sleep at night, but you know as well as the rest of us that Biden is a disaster.

The way you defend this useless fvck is comical!

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Except you guys only care about spending and debt when a democrat is in high office. Trump promised to pay off the debt and run balanced budgets and did neither. The 19.8 trillion he promised to pay off was 27 trillion when he left, and he signed record budget deficits….:roll_eyes:

Excellent diversion.

Time to rid yourself of your zombie dreams.

If you don’t know, a zombie is someone who dies but keeps walking around, causing trouble. All zombies want the same thing:

They want your brain.

A zombie dream is a dream that dies, but it keeps roaming around inside your skull, causing the same kinds of trouble. Like a regular zombie, a zombie dream wants to consume your brain (and your soul). It makes you want things you can’t have, because they don’t really exist. If you let it, a zombie dream will eat up all your thoughts, leaving you a husk.

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Trump in 3 years created 7 million jobs, while cutting government… amazing

And wingers will be heading to an all white first world country when……:thinking:

The only way America survives is if we have the nationalization act return which would eliminate almost all people of color which is natural they can’t assimilate to western cultures.

If you don’t believe me I will be happy to pay minimum wage to 20 Haitians to follow you around all day That can’t speak English…

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