Lifestyle changes I’m talking about I think will be people going out to eat less often, fewer trips to the golf course for marginal golfers like me who aren’t members of any country clubs and things like that. Like I said, a dollar really isn’t worth much already.
The Labor Department’s consumer price index rose 0.4% between August and September, almost 5% at an annual rate. So far in 2021, this broad measure of the cost of living has risen at better than a 6.5% annual rate, well above the Fed’s informal preference for 2% inflation and faster than any time in the last decade and a half. Producer prices tell a similar story. They rose by 0.5% in September, a slight moderation from earlier in the year but still over a 6% annual rate. So far this year they have risen at over a 10% annual rate.
Contrary to Chairman Powell’s claim that the overall figures are the result of just a few pockets of inflation, of the 23 major sectors tracked by the Labor Department, 17 show inflation rates above the Fed’s informal target of 2% annually, and of those, 14 show inflation over a 5% annual rate. Worse for a society that seems these days obsessed with inequity and protecting its most vulnerable members, the mix of inflation pressures puts the greatest burden on the least well off.
Food prices, for instance, have risen at an especially rapid rate, jumping 1.2% in September, more than a 15% annual rate. According to the Labor Department, food absorbs some 14% of the average American’s budget, but that proportion is much higher among lower-income people. If that were not inequitable enough, energy costs have also led in this inflationary surge. In September the cost of all kinds of energy – gasoline, heating oil, natural gas, and electricity – rose some 1.3%, an almost 17% annual rate of gain.
Energy prices have risen over 40% over the past year. These constitute almost 8% of the average American’s household budget but, as with food, a much higher part of the expenditures of poorer individuals and families. Worse still, fuel oil prices rose 3.9% in September, more than a 50% annual rate while natural gas prices jumped 2.7%, almost 40% at an annual rate. Just keeping warm as temperatures drop will burden all but especially the poor for whom these purchases absorb much more of their limited income.
Americans, especially poorer Americans, will have to carry the burden of heightened living costs into the future.
https://www.forbes.com/sites/miltonezrati/2021/11/04/inflation-far-from-transitory/
