June inflation report spikes higher than expected, markets worry

I'm not an economist and I don't play one on TV. Still, I expected inflation to hit 8.8% year-over-year when today's CPI report was released. That prediction didn't come close when the report was released. The headline number was 9.1% year-over-year but that wasn't the figure that caught my attention.

While 9.1% inflation year-over-year is terrible, that isn't the worst news on CPI. According to the article, "Prices jumped 1.3% in the one-month period from May. Those figures were both far higher than the 8.8% headline figure and 1% monthly gain forecast by Refinitiv economists. It marks the fastest pace of inflation since December 1981."

Things aren't improving. They're getting worse. Couple that with the fact that this administration is doubling down on its failing policies and you've got a recipe for a historic disaster. This administration has shown great stupidity in setting economic policy. If stupidity is what gets you in trouble, pride is what keeps you there. Either that or doubling down on counterproductive policies will keep the situation difficult.

Art Laffer weighed in with some grim-sounding news:

Inflation is accelerating according to Laffer. That's the last thing people wanted to hear. Still, it's the truth.

You can bury the Putin Price Hike meme, too, thanks to this:

In another worrisome sign, shelter costs – which account for roughly one-third of the CPI – sped up again in June, climbing 0.6%, matching an 18-year-high set in May. On an annual basis, shelter costs have climbed 5.6%, the fastest since February 1991.

Rent costs also surged in June, jumping 0.8% over the month, the largest monthly increase since April 1986. Rising rents are a concerning development because higher housing costs most directly and acutely affect household budgets. Another data point that measures how much homeowners would pay in equivalent rent if they had not bought their home, also jumped 0.7% in June from the previous month.

We're either in a recession or we're on the brink of one. Inflation hasn't been this out-of-control since December, 1981. It's time for an about-face on economic policy. Clearly, there isn't a justification for continuing the Biden administration's policies, especially their energy policies.

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