Dems spending sends consumer prices soaring

Did anyone really need the feds to tell them that prices on everyday items have exploded due to the trillions of dollars being doled out to Americans.

The definition of inflation is more dollars chasing the same amount of products. Well welcome to the post-pandemic world as prices rose 5.4% in June. That’s on top of the 5% jump in May for year-over-year, according to the Labor Department’s Consumer Price Index.

Energy prices led the way after the Biden administration cut domestic production. Energy costs soared up 1.5 percent from a month prior and are now 24.5 percent higher than a year ago. Gasoline, specifically, rose 2.5 percent from May and is now up more than 45 percent from a year ago.

One driver of the massive annual gain in prices is very low inflation this time last year, when the pandemic gutted the economy and consumers were staying indoors and spending less. That could distort year-over-year comparison as the economy reopens, according to Cliff Hodge, CIO for Cornerstone Wealth.

“June 2020 was the absolute low for Core CPI during the pandemic shutdown, so the comparisons get tougher from here. Used car prices soared 45% year over year which is not likely to persist in coming months,” Hodge noted.

While yearly comparisons may be distorted because of CoVid-19 shutdowns, do not look for a pullback in prices anytime soon as the Democrats look to pass another $3.5 trillion “infrastructure” spending bill later this month.