Notwithstanding slow Joe’s attempts to play political games with the Strategic Petroleum Reserve, the inflation report today was much hotter than people expected and gives the lie to the notion that it is going away any time soon. Particularly important, as I have mentioned before, is to look at the rent and health care items. Rents continued to rise at an unhealthy clip. Rents don’t go down, not like gas or even food prices, which can be volatile. And health care prices, which I am very attuned to, are beginning their acceleration, while health insurance has completely blown up by 24% year-over-year. That is health plans anticipating the coming massive price increases providers are insisting on in negotiations for the coming year. Health care is 20% of the economy. And then there is another little nugget.
New car prices rose rapidly, at least in part because the laughably named recent inflation reduction act provided expanded subsidies, which just gave manufacturers of electric and non-electric cars cover to raise prices without consumers feeling it. And while gas prices, which are highly visible to consumers, have declined in recent months, food prices, which are more important and also quite visible, for food from grocery stores have increased over 13% in the last year. Finally, interest rates are rising, meaning the price of money has skyrocketed. The cost of borrowing money for ten years has more than doubled. The cost of a 30 year fixed mortgage has almost tripled. Yep, Joe, your economic policies are working like a charm–to make things worse for the average American. But don’t worry, those 87,000 new IRS agents are just being hired to help people get bigger refunds.
Update–here is good place to see what has happened to various categories. (ZH Post)