Staff Reports
Inflation continues to give Biden and the Federal Reserve major headaches, with the producer price index shooting up to 2.7% for the year ending in June, according to the Bureau of Labor Statistics. This figure was higher than the predicted slight rise from 2.2% in May, and certainly isn’t the good news anyone was hoping for.
What’s laughable is that the so-called “experts” apparently didn’t see this coming. On a month-to-month basis, the producer price index jumped by 0.2 percentage points, defying expectations yet again. It’s no wonder people are starting to question the credibility of these economic forecasts.
Washington Examiner: Inflation unexpectedly rose to 2.7% in June in producer price index https://t.co/WHiEjabsc9
— Ian Hansen 🇺🇸🇺🇸 (@IanHansenFeed) July 12, 2024
Just a day before this disappointing report, the consumer price index update showed inflation easing to 3%, marking the third straight drop in CPI. But hey, let’s not pat ourselves on the back too quickly. The producer price index, though not as glamorous or widely recognized as the CPI, measures the prices received by businesses and suppliers. And this jump in the PPI suggests there’s still trouble brewing beneath the surface. Fed officials and savvy economists know these price movements can eventually trickle down and hit consumers where it hurts.
Jennifer Lee of BMO Capital Markets was cautiously optimistic in her assessment of the CPI’s downward trend, but even she had to admit that the rising producer prices would keep the Fed from getting too comfortable. The Federal Reserve’s goal is to bring inflation down to 2%, but with prices continuing to simmer at the producer level, Biden and his crew shouldn’t start celebrating just yet.
Inflation has been a hot topic as we approach the election, casting a shadow over Biden’s economic approval ratings. Despite the White House’s desperate attempts to spotlight the drop in inflation since its peak in 2022, voter discontent remains palpable. Republicans and former President Donald Trump have understandably seized this opportunity to hammer Biden on his economic performance—or lack thereof.
Polls aggregated by RealClearPolitics show that over 58% of Americans disapprove of Biden’s economic policies, while only 39.7% approve. As if that weren’t enough, Biden’s mediocre handling of the economy continues to be a massive anchor on his overall approval ratings. The labor market may be holding up with low unemployment and June’s addition of 206,000 jobs, but this doesn’t negate the continued financial strain felt by families. The unemployment rate ticking up to 4.1% hardly instills confidence, even if it is still relatively low by historical standards. Just how sustainable this labor market strength is remains to be seen as inflationary pressures persist.
