According to the latest consumer price index report from the U.S. Bureau of Labor Statistics, inflation report shows that in November 2021, prices were high by 6.8% which is the highest in 39 years.
Cost Per Index (CPI) in October 2021 was 0.9 percent, it’s 0.8% in November; both are still high and something to be worried about because they exceeded most economists’ forecasts. Higher inflation is affecting food, shelter, gasoline along with a wide variety of goods and services.
A lot of economists said that inflation was going to rise above 7% in November 2021, but having it at 6.8% is the best the White House (Biden Administration) could have hoped for. Alex Lin, a Bank of America economist thinks ok inflation could peak around March and April 2022 and that it’s time to call a spade a spade and stop calling inflation transitory.
CNBC spoke with lots of economists and they said the November inflation report is a sign of incoming inflation.
Alex Lin in particular extensively said that “our view is that the peak will probably be sometime around early next year, probably the first quarter, and the reason that we would say that is largely due to kind of the base effects. As you recall from earlier this year, once you got to around April 2021, core inflation was extremely hot.”
“I guess the most notable aspect is that you’re seeing some of the more persistent components start to run a little firmer, most notably the two major rental measures. Things like food away from home tend to be pretty sticky,” said JPMorgan chief economist Mike Feroli.
Most Economists are blaming COVID-19 as the cause of inflation, voters may blame President Joe Biden for the continued increase in the prices of goods and services.
While most economists say that the Covid-19 pandemic is to blame for the ongoing inflation problems, voters may look to blame the White House for continued increases in the price of gas and groceries. This may be bad for getting a return ticket to the White House. In fact, according to CNBC’s most recent All-American Economic survey, Biden’s approval rating is at 37%.
Cecilia Rouse; the White House economic advisor spoke with CNBC. She believes that inflation will come down over the coming months, especially because vaccination is healing the world, the economy is being restored and inflation will ease.
Tony Fratto, a Treasury Department official in the George W. Bush administration, believes that inflation will be moderate in 2022 because of the withdrawal of fiscal support, the tapering, the adjustments on the supply chain issues. He believes that inflation will not be an issue in 6 to 7 months’ time.
Lindsey Bell, chief investment strategist at Ally Invest saw hope in the fact that the US stocks appear to shrug off inflation by not going up significantly higher. She feels the economy is stabilizing.