The February inflation report is in, and it’s at 7.9 percent, the highest rate since January 1982. Also in January 1982, the San Francisco 49ers, led by Joe Montana, defeated the Cincinnati Bengals in the Super Bowl at the Pontiac Silverdome.
Unlike in 1982, though, the Silverdome no longer exists, inflation is going up, not down, and while there’s a famous Joe in the headlines, he certainly isn’t “Joe Cool.” President Biden greeted the news from the Bureau of Labor Statistics by saying, “Today’s inflation report is a reminder that Americans’ budgets are being stretched by price increases and families are starting to feel the impacts of Putin’s price hike.”
Putin’s price hike? It certainly matters for the global oil market that the dictator of the third-largest producer of crude oil invaded his neighbor unprovoked. The sanctions on the Russian economy will cause problems for energy, metals, and food markets for months at least. But it’s not as though inflation was coming back down and then turned around because of the war in Ukraine.
The BLS first described our current bout of inflation as “broad-based” in its October 2021 report, and that fact hasn’t changed since then. Where the White House used to point to the soaring price of used cars and claim it was making the average look worse, the price index for used cars actually declined last month, while food and energy prices increased faster than they did in January. “All six major grocery store food group indexes increased in February,” the report says. And we all know what gas prices have done in the past few weeks.
About those gas prices, the White House said, “When we have electric cars powered by clean energy, we will never have to worry about gas prices again. And autocrats like Putin won’t be able to use fossil fuels as weapons against other nations.” And we’ll eat ice cream for breakfast, lunch, and dinner, too.
And for the love of all that is holy, this has nothing to do with corporate greed. “I’m promoting competition to make sure big corporations are offering consumers fair prices,” said Biden. If he has evidence of economy-wide price-fixing, now would be a good time to show it.
Remember when inflation was going to be “transitory”? Good times, good times. After going up by 0.6 percent in December and again in January, it went up by 0.8 percent in February. “Fed officials were braced for a run of higher inflation to start the year, but recent trends have been higher than expected,” reports the Wall Street Journal. At some point, Fed officials should probably re-evaluate their expectations because they’ve been caught by surprise an awful lot recently.
Jerome Powell said the Fed will proceed as it had planned before the Ukraine invasion, with a quarter-point increase in interest rates this month and additional increases throughout the year. It’s the right move, but one begins to wonder whether it will prove to be too little too late.
Before long, we’re going to leave the ’80s and reenter the ’70s on inflation. When Joe Montana was winning Super Bowls, there was optimism and the country was turning itself around. In the ’70s, things were less peachy. Malaise? Kamala Harris said it first.