Hurricane Season is Upon Us

Inflation is increasingly a lot like the weather: everyone talks about it, but no one does anything about it.   View in browser   July 30, 2021 advertisement   Use Visa or MasterCard? Get Ready to SHRED Them!

Today's Top Stories From the Breitbart News Desk Inflation is increasingly a lot like the weather: everyone talks about it, but no one does anything about it. The Commerce Department released its version of an inflation report on Friday. Called the Personal Consumption Expenditure Price Index, this is the measure of inflation preferred by the Federal Reserve ever since the Fed ditched the Department of Labor's Consumer Price Index sometime around the turn of the century. The official reason for the divorce was that the expenditure weights in the PCE can change as people substitute away from some goods and services toward others—making it a more timely read on prices paid by households—and that the PCE includes more comprehensive coverage of goods and services than the old fashioned CPI. Cynics at the time accused the Fed of favoring the PCE Price Index because it tended to show lower inflation. Back then, people thought that the Alan Greenspan-led Fed was looking to downplay inflation. The punchline to that joke is that after the financial crisis, the Fed's big project was trying to raise inflation to two percent a year—a task it failed at for nearly a decade. The good news—if you want to call it that—is that the long history of undershooting inflation has come to an end. Annual PCE inflation came in at 4 percent in June, the highest rate since June of 2008. Core PCE inflation, which strips out food and energy, hit 3.5 percent, the highest level since 1991. This is far above anything forecast by the Federal Reserve earlier this year. But it actually slightly undershot Wall Street's expectations for 3.6 percent core inflation. Changing inflation expectations were the theme of Friday's University of Michigan report on consumer sentiment from Richard Curtin. Expected inflation over the next year rose to 4.7 percent from 4.2 percent in June. That's the highest level in over a decade. Consumers remain quite relaxed about inflation over the longer-term, seeing five-year inflation averaging 2.8 percent. That may be about to change, Curtin warns, because an "inflation storm" looms just over the horizon as consumers are increasingly willing to pay up for goods and services on the grounds that it's just a temporary blip due to the reopening. That, however, is enough to "generate an upward spiral in prices and wages," in Curtin's view. Add to that a Fed determined not to raise rates and a Democrat-controlled government determined to spend trillions. It may not be enough for an inflation hurricane, but we won't be surprised if a tropical storm or two hits. – Alex Marlow & John Carney Breitbart News Network

TOP STORY

'Inflation Storm' Looms as Expectations Hit 13-Year High, Consumer Sentiment Sinks

Americans expect more inflation this year and remain uneasy about the direction of the economy, the University of Michigan's survey of consumers showed Friday. Expected inflation over the next year rose to 4.7 percent from 4.2 percent in June. That's the highest level in over a decade. At least for now, however, Americans still believe that inflation will remain tame over the long term. Expected inflation over the next five years is just 2.8 percent, down from 3 percent in May. [Click here for more]

IN OTHER STORIES...

Core Inflation Hits Highest Level in 30 Years

A key measure of inflation reached a 30-year high last month, data released Friday by the Commerce Department showed. Excluding food and energy, consumer prices were 3.5 percent higher last month than they were in June 2020, the briskest pace of inflation since the summer of 1991 and an acceleration from... [Click here for more]

Bidenflation: Prices and Spending Climbed in June

Household spending picked up more than expected in June and prices continued to climb. Personal consumption expenditures rose by one percent last month, more than the six-tenths of a point forecast by economists. Adjusted for inflation, the spending increase was... [Click here for more]

Joe Manchin Booed by Democrat Senators for Raising Concerns over 'Infrastructure' Expense

Sen. Joe Manchin (D-WV) was reportedly booed Thursday by Democrat Senators for raising concerns about the expense of the $3.5 trillion "infrastructure" price tag. "One source described the West Virginian as being 'jokingly booed' by the other senators, but another source in the room did not see it that way," Politico Playbook reported. "Tensions are torquing up among Democrats over the... [Click here for more]

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