Inflation Is Still Around, Despite the Headlines, You Saw: Read the headlines this week, and it would seem that some economists have rose-colored glasses – or are simply used to paying more at the checkout lane.
The Washington Post reported “CPI: Prices rise 6.4 percent in January, seventh month of easing inflation,” while The Wall Street Journal offered, “Inflation Cooled to 6.4% in January.”
At least The New York Times was a bit more honest with its headline, “CPI Report Updates: Inflation Eases but Details Are Worrying.”
Inflation Is a Serious Problem
Let’s focus on the bad news first – inflation was still 6.4 percent in January.
Though that is a marked improvement from a year ago, when inflation was 7.48 percent, it is still much higher than the 1.4 percent from January 2021 and the 2.49 percent in 2020 before the start of the Covid-19 pandemic.
The consumer price index, which measures a broad range of common goods and services, rose 0.5 percent for the month, translating to an annual gain of 6.4 percent.
It Gets Worse
Even worse news was that economists surveyed by Dow Jones had been looking for respective increases of 0.4 percent and 6.2 percent.
Though the White House may see that as good news, it suggests there is still a long way to go.
In the meantime, inflation is hardly in check.
This high inflation is reshaping the world, including travel and leisure, which has accounted for the tight job market and low unemployment.
The hospitality sector saw the most job growth as more consumers are looking to get back to more normal vacations – but consider it a new normal, as inflation has resulted in shorter trips, while travelers are staying at cheaper hotels and eating in less expensive restaurants to save money.
Simply put, four- and five-star options have become less desirable.
Axel Hefer, CEO of search platform Trivago, told CNN. “People still do want to travel and do travel, but they’re still trying to compensate for the increase in prices.”
It Gets Even Worse Sitll
The problem is likely to get worse this spring. Gas prices are now considerably lower than last June, but they’re still high by historical standards, according to Energy Information Administration data.
There are also warning signs that gas prices will shoot up again in the coming weeks as warmer weather approaches. That can only make inflation worse.
All of this seems to contradict the positive outlook that was touted by President Joe Biden in last week’s State of the Union address.
Jim Geraghty, a senior political correspondent of National Review, even suggested, “This administration has many bad habits, but one of the worst is its inclination to spike the football in victory at any glimpse of good news, only to be quickly overtaken by bad news.”
In other words, the recent headlines may parrot Biden that things are getting better, but 6.4 percent inflation and $3.4 for a national average gallon of gas price can hardly be considered anything but bad news.
As for the good news… we’ll let you know when we actually hear it.
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Author Experience and Expertise: A Senior Editor for 19FortyFive, Peter Suciu is a Michigan-based writer. He has contributed to more than four dozen magazines, newspapers, and websites with over 3,200 published pieces over a twenty-year career in journalism. He regularly writes about military hardware, firearms history, cybersecurity, politics, and international affairs. Peter is also a Contributing Writer for Forbes and Clearance Jobs. You can follow him on Twitter: @PeterSuciu.
