Another “bad” inflation report, although it isn’t that bad. We all know the Iran conflict has raised oil prices and that means gasoline and diesel in particular are more expensive, although in the US that is really due to refinery capacity issues which in turn are due to Dems refusal to allow any new refineries or expansion of existing ones because fossil fuels are evil. And that has caused an increase in the cost of many goods, partly because any time there is a threat of inflation some suppliers of goods and services will use it as an excuse to raise prices. The headline is that prices overall were up sixth-tenths of a percent for the month and 3.7% year-over-year. So-called “core” prices increased at a .3% rate for the month and 2.6% for the year. This strips out food and energy costs because they are “volatile”. They are also really important to consumers.
Service costs are rising faster than goods prices. Gasoline, used cars, hospital services, airline fares all experienced notable increases. Food prices actually are down or pretty stable. Housing costs are fairly restrained. The detailed table at the BLS is interesting to look at, as this breaks prices down into a lot of detail, kind of amazing detail actually. We clearly have inflation and how much it will subside after the oil price impacts are lessened is unclear. But it is enough now to make consumers unhappy. The absolute worst news is that prices appear to be growing faster than income and that has a very negative impact on consumer’s perceptions. (BLS Table)
But what is missing from this report is the growth in the single biggest cost for everyone–the cost of government. Income taxes, sales taxes, property taxes, fees of every kind; the total cost of government is growing far faster than general inflation. And that cost of government for a seller of products or services gets baked into the prices that everyone pays for those goods and services. I think these inflation reports need to single out the cost of government and it should be the headline item, so that voters understand where the biggest driver of increased spending for them comes from.
Spot-on; BIG government (Medicare & Medicaid, plus fraud and abuse) interest on ginormous debt, bloated federal and state bureaucracy [incl. pension costs], education and more. As a private enterprise persona when revenue growth or declines, cuts are made (Netflix example this week), whereas government increases taxes and rarely makes real cuts.