Federal data shows troubling sign of inflation
(The Center Square) – A new federal inflation report shows a continued trend of consumer price increases, raising concerns as Congress considers trillions of dollars more in federal spending.
The Department of Commerce reported Friday that the personal consumption expenditures index, a key marker of inflation, had risen 3.5% in the previous 12 months, the biggest increase since 1991.
“Personal income increased $26.1 billion (0.1 percent) in June according to estimates released today…” the Commerce Department’s Bureau of Economic Analysis said. “Disposable personal income (DPI) decreased $2.6 billion (less than 0.1 percent) and personal consumption expenditures (PCE) increased $155.4 billion (1.0 percent).”
Rising inflation makes goods and services more expensive for Americans and has become a political headache for the Biden administration. Republicans were quick to criticize Democrats over the numbers Friday.
“Inflation is a tax on every American family…” Rep. Elise Stefanik, R-N.Y., said. “This is a result of Democrats’ reckless tax and spend policies.”
The Bureau of Labor Statistics released data earlier this month that showed inflation rose more in June than in any month since the 2008 financial crisis.
“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9 percent in June on a seasonally adjusted basis after rising 0.6 percent in May…” BLS said. “This was the largest 1-month change since June 2008 when the index rose 1.0 percent. Over the last 12 months, the all items index increased 5.4 percent before seasonal adjustment; this was the largest 12-month increase since a 5.4-percent increase for the period ending August 2008.”
The spike in inflation has been a source of concern for critics of President Joe Biden’s several trillion dollars in federal spending. They point to the rise in federal spending, and the printing of money that sustains it, as a key cause of inflation.
“We’re seeing an inflation bomb growing across our economy,” U.S. Sen. Ted Cruz, R-Texas, said.
Republicans have capitalized on the rising inflation numbers in campaign ads against Democrats. They point to Democrats’ aggressive spending proposals as the reason for higher prices.
“Democrats should focus on getting inflation under control instead of trying to spend another $3.5 trillion on their socialist agenda,” said Mike Berg, spokesman for the National Republican Congressional Committee. “Democrats’ harmful economic policies are hurting American families.”
The Biden administration, though, has called for more federal spending, arguing it will help American families and stimulate the economy.
“As we emerge from the pandemic, our economic priorities cannot be stuck in the past if we want to build a competitive economy,” Commerce Secretary Gina Raimondo said. “It’s time for Congress to address our lack of care investment.”
The inflation report comes a day after other economic data showed Gross Domestic Product (GDP) has grown more slowly than experts predicted and joblessness remains high.
The Department of Commerce released data this week showing GDP grew 6.5% from April to June, well below the 8.4% increase experts predicted. The federal government also reported 400,000 first-time unemployment filers for last week, a drop from the previous week but nearly double pre-pandemic levels.
Meanwhile, new guidance from the U.S. Centers for Disease Control and Prevention (CDC) have said even vaccinated Americans should wear masks in certain areas. That CDC reversal from May guidance, along with more COVID-related restrictions in cities around the country, raises questions over whether the economy will suffer another wave of shutdowns.
“One week ago, President Biden said inflation was ‘temporary,’ and that spending trillions more would ‘reduce inflation, reduce inflation, reduce inflation,’” House Minority Leader Kevin McCarthy, R-Calif., wrote on Twitter. “Mr. President, with all due respect – WAKE UP.”
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