Up, up, and away. Prices in the U.S. are on the rise and the Biden White House still seems mystified about why that’s so.
Prices rose 5.4 percent in September, a little higher than the 5.3 percent rise in August. But according to the White House, prices shouldn’t be rising at all. We were told the increase was “transitory” nothing to worry about and that once things began to get back to normal, inflation wouldn’t be a problem anymore.
But prices continue to rise despite the end of shutdowns and most other disruptions. The culprit, we’re told, is “supply chain bottlenecks.”
Oh, really?
Economic data from September underscored how vulnerable the economic recovery remains to the pandemic — and how policymakers underestimated the threat posed by the delta variant when the surge began a few months ago. On the labor front, the economy gained only 194,000 jobs last month, and officials said ongoing concerns about child care and fear of the virus kept people from returning to work.
On the inflation side, Fed leaders have long said that price increases are a “transitory,” or temporary, feature of an economy battered by the pandemic. Their message is that as supply chains clear up, inflation will settle back down closer to the Fed’s 2 percent annual target, sometime next year.
No doubt the bottlenecks are playing a role. But are they all caused by the delta variant? Or are there other, more preventable policies that represent the true bottleneck?
There is currently a massive truck driver shortage that’s leading to all sorts of problems up and down the supply chain.
The trucking association said in 2019 it was going to be short at least one million drivers in the coming years.
That’s only been made worse by the pandemic says Brad Ball, the president of the Roadside Drivers Schools.
“A lot of drivers were retiring early during COVID that were planning to retire in the next few years, so suddenly the supply shrunk, the demand grew,” said Ball.
Burch says the industry is trying to recruit more women and younger people into the industry. Women currently only make up about six percent of truck drivers nationally.
Regardless of the reason, the higher inflation will trigger a cost-of-living increase for Social Security recipients of 5.9 percent — the highest increase in decades.
The cost-of-living increase, which will impact roughly 70 million people starting in late December and January, is tied to a measure of inflation that has surged this year as prices rise in a U.S. economy emerging from the coronavirus pandemic. Experts caution that millions of seniors will in reality see substantially less than a 6 percent bump, because Medicare Part B premiums are deducted from Social Security beneficiaries’ checks and are tied to seniors’ income. The increase in benefits will amount to roughly an additional $92 per month for seniors.
It’s not going to be enough with the rate that food and energy costs are going up. According to the WaPo article on inflation, “Wednesday’s release from the Bureau of Labor Statistics noted that the indexes for food and shelter rose in September — and together contributed to more than half of the monthly all items seasonally adjusted increase.”
Under Biden, the U.S. is going to “Build Back Better” alright — everything will just cost a lot more, that’s all.
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