Baby, it’s cold outside. Well, except when it comes to the cost of living as the US annual inflation rate was red hot in February. Once again, the consumer price index (CPI) was broad-based and posted a fresh 40-year high. What made this a frightening report for many market analysts and investors was the fact that these numbers escalated before Russia’s invasion of Ukraine. The war has quickly intensified the issue, however. From avocados to fertilizer to crude oil to wheat, everything has spiked in the fallout of the military conflict in Eastern Europe – and not even the Federal Reserve and other central banks can save the economy from the torment of higher prices.
Price Check on Every Aisle
Last month, the annual inflation rate surged 7.9%, meeting the median forecast, according to fresh data from the Bureau of Labor Statistics (BLS). This is up from the 7.5% gain in January. The core inflation rate, which eliminates the volatile energy and food sectors, swelled at an expected pace of 6.4% year-over-year in February.
All the main indexes were up. Food spiked 7.9%, energy soared 25.6%, new vehicles added 12.4%, used cars and trucks skyrocketed 41.2%, apparel rose 6.6%, and shelter increased 4.7%. Transportation services jumped 6.6%, while medical care services edged up 2.4%.
Within these categories, it became evident that inflation is ubiquitous in every area of the national economy. Pork rose 14%, eggs picked up 11.4%, lettuce added 7.9%, gasoline surged 38%, men's shirts swelled 12.8%, and financial services increased 9.1%. Even on a month-over-month basis, noticeable gains in food and non-food products critical to households across the country were felt.
What’s more, shoppers are paying prices that are the highest on record. Furniture, chicken, baby food, pet supplies, and flooring are some of the goods that are the highest ever recorded.
Throughout all of the expenditure categories in the BLS report, there were only a few declines, including wireless telephone services (-0.4%), smartphones (-13.2%), videodiscs (-7.4%), and ship fare (-0.9%). While sky-high gasoline prices are getting all the attention as of late, consumers are feeling pain in their wallets in each sector of the marketplace, from the food on a dinner plate to the dinner plate itself. Nothing is immune to Bidenflation or, if you will, Powellflation.
But, as the old adage goes, you ain’t seen nothin’ yet. So, brace yourselves, the financial pain from the Ukraine-Russia conflict will be felt in the next March CPI report. Be afraid. Be very afraid.
Is This Even Accurate, Bruh?
Remember when the White House, the Federal Reserve, and professional economists told everyone that inflation would not even be on the radar or it would be transitory? Those were good times. But even when they are speaking in earnest, they still cannot get the most basic fundamentals correct.
The problem with the CPI is that it is not entirely representative of the economy’s inflationary challenges. The US government has altered its calculations over the years, which explains why economists purport that inflation is higher than Washington determined. For example, the bureaucrats do not factor housing prices into the CPI. Considering that the median sales price of residential properties sold in the United States hit an all-time high of $408,100 in the fourth quarter of 2021, it is safe to say that the annual inflation rate is in the double digits.
The Poor vs. The Rich
The occupants inside the ivory tower suggest that inflation does not impact the poor and middle-class. Anyone in possession of a modicum of common sense can determine how asinine this statement is, one that emanates from the brilliant minds of Nobel Laureates, including Paul Krugman. Americans with a pre-tax income level of under $40,000 will spend more on groceries, rent, utilities, and gasoline and are far more likely to be in financial distress with little savings. But, according to the narrative put forward by the Fourth Estate, it is your patriotic duty to pay more for goods and services.
Will March Be a Bloodbath?
If you have been paying attention to the financial markets as of late, or you have been keeping up with the reporting on Liberty Nation, you will have noticed the dramatic price hikes. The Ukraine-Russia battle has resulted in an enormous surge across the commodities landscape, be it agriculture or energy. Wheat recently touched an all-time high on the Chicago Board of Trade (CBoT), a gallon of gasoline is well north of $4, fertilizer costs have reached record highs, and even gold topped $2,000 an ounce. Unless all of these price hikes evaporate by the end of the month, Americans should be prepared for an inflationary report never seen before. If February was bad, then beware the ides of March.
~ Read more from Andrew Moran.
