Prices rise 5.4 percent in June over last year as economy continues to recover

[brooklynite]

Source: Washington Post

Prices rose 5.4 percent in June compared with one year ago, reflecting upward-creeping inflation throughout the economy, as more consumers open their wallets and supply chains struggle to bounce back from pandemic pressures.

Still, policymakers at the Federal Reserve and White House continue to predict that as the economy has time to heal, inflation will settle back down.

Data released by the Bureau of Labor Statistics on Tuesday showed that prices rose 0.9 percent in the past month. The latest figures aren’t likely to rattle officials who have long maintained that the price increases are a temporary feature of a bumpy economic recovery. Their expectation is that inflation will simmer down closer to the Fed’s 2 percent annual target next year and in 2023.

There are a few reasons inflation is on the rise. For starters, prices in 2021 are being compared to those from 2020, when the pandemic caused the economy to shut down and prices fell.

Read more: https://www.washingtonpost.com/business/2021/07/13/inflation-cpi-june-prices-fed/

[Calista241]

1. Watch this space.

Inflation is one of the single biggest risks for Dems going into the 2022 elections. The other is crime.

[jimfields33]

2. Absolutely. Nothing frustrates voters more then spending 100 dollars on groceries

That a few months ago cost 75 dollars.

[riversedge]

16. I know what you mean. I usually go for a big buy every 3-4 weeks. Buy milk at

local store. but whow. I know almost every item was UP!! UP!!

Waiting for beans in garden. been eating the lettuce, onions so far.

[IronLionZion]

3. I expect grocery prices should normalize by 2022

it's highly competitive depending on the product. A lot of this increase is from restaurants/businesses purchasing more food after opening up 100% capacity.

Oil is it's own beast and is global. Then there are products like computer chips and lumber to look out for depending on raw material availability.

[NickB79]

10. Given the Western drought, don't count on it

A lot of food cost increases are baked in by the drought (pardon the pun).

And given the long term climate trends towards permanent aridification, a lot of that Western agriculture is never coming back

[IronLionZion]

14. That certainly affects meat prices as ranch land is drying up

not sure about other farm products since much of it is traded globally.

[Evolve Dammit]

4. Costs of almost everything are soaring. Food, building materials, raw materials, specialty products

[GB_RN]

7. Global Warming Is Part Of Why Building Materials Are Expensive

Rising temperatures in the west, especially warmer winters in Canada allow the pine bark beetle populations to survive over the winters, leading to larger and larger broods. The beetle broods then kill the pine trees that are used for lumber. Circular problem. Add that problem to tRump's tariffs on Canadian lumber (don't know if Biden has removed those yet or not) and that's why lumber has gotten expensive.

[NullTuples]

8. Well, that and lumber futures speculators...

They've done a number on prices by intentionally creating a bubble to make profits on both sides of the curve.

Funny though, how many of them are the same large financial institutions that have also cornered the market on rentals via real estate subsidiaries in many metro areas...

[Chakaconcarne]

5. is this just a response to all the $$ out there?

[ScratchCat]

6. Here's a problem I have

Given that demand for many products fell drastically during the pandemic, and I can't help but wonder if some retailers/manufacturers aren't simply jacking up the price to make back what they lost in 2020. I know this isn't the case with all things, as there are legitimate price increases due to shortages. And I get some prices increase with fuel costs. But its not like fuel costs don't fluctuate always, anyway, and prices didn't exactly drop on most things that are now rising. Food didn't go down despite all the restaurant closures, and now they are blaming some food price increases on "restaurants back open".

[LT Barclay]

11. I had the same thought, but even increases due to shortages

Are still just exploiting the pandemic for profit.

[George II]

12. That's exactly it. Comparing this year to last year doesn't give us an idea of what's going on...

I wonder what this year versus 2019 is? Better yet, a three year comparison would give us a much better idea - 2019 to 2020 to 2021.

I hated year over year comparisons when I was working. We'd have our best year ever and then the next year they'd say "our sales are flat compared to last year." That's GOOD considering the last year was the best ever.

[The Mouth]

19. But that is not how public opinion works

People (voters) ARE going to compare gas and food prices against LAST year.

It's a big, big, BIG danger for us.

Inflation got us Reagan last time.

[progree]

24. June 2019, June 2020, June 2021, February 2020 ...

https://data.bls.gov/timeseries/CUSR0000SA0
June 2019: 255.423
June 2020: 257.282
June 2021: 270.981

June 2019 to June 2020: +0.73%
June 2020 to June 2021: +5.32%
June 2019 to June 2021 (2 years): 6.09% (3.00% annualized)

February 2020 (the pre-pandemic CPI peak): 258.824
February 2020 to June 2021 (16 months) : +4.70% ( 3.50% annualized )

[George II]

25. That makes sense. Consumers are getting hit this year for what didn't happen last year...

It's best to essentially average the two years. It's still a little higher than it should be, but there are intangibles involved, too. Things like spoilage for food that didn't get delivered or used, energy to heat/cool buildings that remained empty, oil companies recouping their revenues they didn't get last year, etc.

Lots of businesses still had some overhead even though they were closed or operating with skeleton crews.

Back to the consumers, even though prices are up more than a "normal" year, many are still ahead of the game because their spending last year was WAY down because they simply didn't go anywhere.

I read somewhere that the experts aren't concerned that this is a short-lived inflation cycle.

[NullTuples]

9. Something barely mentioned is the shipping "crisis"

Available shipping containers / slots on ships are simply not available months out due to the pandemic & the effect it had on buying habits. It's like a tidal wave that I think perhaps some politicians foresaw thanks to their biggest investor class supporters (read: owners) & that's why they tried to keep everything open even if it killed people.

Couple that with entire supply chains that are now broken.

And a full year of the USA not having functional federal government agencies, and policies that only considered opportunity for plunder.

And corporations minimizing production resiliency since the 1980's in order to maximize this quarter's profits.

We've got a lot of rebuilding to do and like the virus itself this is going to be around for another year at least. And with supply chains and products, that's before we can start building on anything like a solid baseline.

But here's my question: Why are we not seeing massive layoffs? Is it because that was already taken care of during 2020 & furlough looks better on the books & quarterly statements to investors? It's like there's a piece of the balance sheet missing.

[Vinca]

13. That's all? It seems like it should be more. This morning I stopped at the local farmstand

and ears of corn were 89 cents EACH. I paid $9 for a qt. of strawberries. Ouch!

[gab13by13]

15. 5.4% and we SS recipients got 1.2% COLA.

[jimfields33]

18. You should do better in January 2022

[LanternWaste]

20. Objective evidence being what?

[jimfields33]

21. You should get a decent SS raise.

[LanternWaste]

22. I don't collect, chum.

[jimfields33]

23. Oh I see what you did!!!!!!!!!!!!!!!!!!!!!!

[George II]

26. This year's COLA was based on last year's increases. Next year's COLA will reflect this year.

[OneCrazyDiamond]

17. You mean the former guy was wrong

when he said a Biden presidency would cause a depression.