Inflation Escalates Yet Again, Spiking to a Whopping 8.5% as Fears of Recession Grow
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The latest numbers show inflation is climbing even higher, making it harder and harder for Americans to keep up with their bills and pay for essentials like food and gas.
Today's Consumer Price Index shows inflation reaching its highest level, soaring 8.5% over the last year – the biggest year-over-year increase since 1981.
The White House tried to get out in front of the shocking report, warning that today's number on the Consumer Price Index would be exceptionally high.
The Biden administration is attempting to blame the war in Ukraine for the ongoing spike in America's cost of living, saying it would be "extraordinarily elevated due to Putin's price hike."
Although the Russian invasion of Ukraine did push energy costs higher, prices were already climbing sharply for months before the war began. Inflation over the last year has been running at nearly eight percent, but incomes haven't kept up.
Mark Zandi, chief economist at Moody's Analytics, said, "Wages are closer to 6%. So inflation is faster than wage growth. That's not good. That means people's purchasing power is declining. And they're not able to buy as much as they did a year ago."
The sharp increase in inflation has many economists warning of a possible recession by the end of next year as the Federal Reserve raises interest rates in an attempt to cool down the economy.
Zandi said, "It's in this kind of environment, high inflation, high interest rates when things kind of go off the rails and recessions can occur. People are already pretty nervous, but if they lose faith and run for the bunker and stop spending, stop hiring, stop doing what they typically do, that would be a recession."
Critics are blaming huge infusions of government spending, pointing to the Biden administration’s $1.9 trillion March 2021 stimulus program, which included $1,400 relief checks for most households, for helping overheat an already sizzling economy.
EJ Antoni, research fellow for regional economics with The Heritage Foundation's Center for Data Analysis, said, "Americans are losing savings and purchasing power from the 'hidden' tax of inflation. If President Biden and others are serious about helping working Americans, they need to take responsibility for the mess they created, cut government spending, and end the regulatory war on American energy production."
Inflation has been the top issue for voters and is expected to play a major role in this year's midterm congressional elections.
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