US Price Inflation in at 31% Annualized

Holy Cow!

The latest numbers of the US Consumer Price Index (CPI) and Producer Price Index (PPI) have been released this week by the Bureau of Labor Statistics. The information is a month behind, so the numbers correspond with the start of October of 2021. Let’s dive into it.

CPI for All Urban Consumers: All Items in US City Average

The October update of CPI for All Urban Consumers came in at 276.72. Last month, the same CPI was reported as 274.14. That is a monthly change of 2.58%. This equates to an annualized price inflation of 31% (2.58 x 12) from the perspective of consumers. Holy cow!

Let’s zoom in on the chart to better see the climb. Look at where CPI was in January 2020, before the Covid hysteria hit.

PPI by Commodity: Final Demand

The PPI by Commodity for October 2021 came in at 129.7 (a 29.7% increase from the basis point of November 2009). Last month, the same PPI was reported as 128.9. So the monthly change is 0.8%. This equates to an annualized price inflation of 9.6% (0.8 x 12) from the perspective of producers. Significant.

We can see that prices in the US continue to rise with no real signs of deceleration. Note that just before Covid-hysteria hit in January 2020, the CPI and PPI were 258.7 and 119.2, respectively. Prices are now reported at roughly 11%-18% higher since the madness began.

Biden’s infrastructure bill — of which we took a peek into earlier this week — will only fuel the fire of rising prices. Add to that, the rest of the impending Build Back Better agenda, and that fire turns into a bomb.

Monetary inflation leads to general price inflation. But, the Biden administration is either ignorant of this fundamental or is lying to the American people.

Yesterday, Biden brushed off price inflation concerns at a virtual grassroots event for the Democratic National Committee, saying,

“You know, the Build Back Better plan is not going to cause inflation like people are talking about, because 17 Nobel laureates in economics have looked at my plans and said they will — it will ease inflationary pressure. So, for those Americans who are focused on the cost of living, it’s even more important to pass this legislation.”

Biden’s appeal to authority is insulting. You see, “17 Nobel laureates” say everything will be coming up roses, so you should stop worrying and learn to love the bomb.