As the causes of US inflation grow, so do the dangers

The Associated Press ^ | October 14, 2022 | By CHRISTOPHER RUGABER (D-AP)

[Oldeconomybuyer]

WASHINGTON (AP) — What keeps driving inflation so high? The answer, it seems, is nearly everything.

Supply chain snarls and parts shortages inflated the cost of factory goods when the economy rocketed out of the pandemic recession two years ago. Then it was a surge in consumer spending fueled by federal stimulus checks. Then Russia’s invasion of Ukraine disrupted gas and food supplies and sent those prices skyward.

Since March, the Federal Reserve has been aggressively raising interest rates to try to cool the price spikes. So far, there’s little sign of progress. Thursday’s report on consumer prices in September came in hotter than expected even as some previously big drivers of inflation — gas prices, used cars — fell for a third straight month.

Overall inflation did decline a touch, mostly because of cheaper gas. But costlier food, medical care and housing pointed to a widening of price pressures across the economy.

Here’s what’s driving persistent inflation and what it means:

SPENDING STILL HOLDING UP — FOR SOME

Consumers, on the whole, are still managing to spend more, even though average wage gains over the past year haven’t kept up with inflation.

SERVICES INFLATION TAKES OVER

Rising prices can often lead consumers to switch their spending to other things, rather than cutting back overall. Right now, for instance, Americans are switching more of their spending from physical goods to services.

HOUSING PRICES DEFY FED

The Fed’s rate hikes have led to vastly higher mortgage rates.

WILL THE FED CAUSE A RECESSION?

That’s the biggest fear overhanging the economy.

FED PREPARED TO WEAKEN ECONOMY FOR A ‘FEW YEARS’

At their most recent meeting in late September, Fed officials warned that their rate hikes would likely slow the economy for an extended period?

[Oldeconomybuyer]

No mention of Brandon, democrats, government spending, government regulations, or the progressives war on energy producers.

[marktwain]

Everything but the clear and obvious: Government creating money out of nothing.

[eyeamok]

Don’t worry, if the Country runs out of money, they will just print more...

Now why wouldn’t a presstitute list DEVALUATION of the Nations Currency as the leading cause of Devaluation(inflation)

[dfwgator]

“Spend all you want, we’ll make more.”

[IC Ken]

We are in a recession. They lie.

[ridesthemiles]

WHAT is ‘an extended period”???

In Archaeology—that is a very long time !!!

[NWFree]

No mention of the real causes because it’s too much to expect lower life forms like libtards to understand the problems they cause much less fix them

[kabar]

M1 Money Supply 1959-2022 (august)

Before May 2020, M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other checkable deposits (OCDs), consisting of negotiable order of withdrawal, or NOW, and automatic transfer service, or ATS, accounts at depository institutions, share draft accounts at credit unions, and demand deposits at thrift institutions.

Beginning May 2020, M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other liquid deposits, consisting of OCDs and savings deposits (including money market deposit accounts). Seasonally adjusted M1 is constructed by summing currency, demand deposits, and OCDs (before May 2020) or other liquid deposits (beginning May 2020), each seasonally adjusted separately.

[Huskrrrr]

Inflation will be around for years. The best the Fed can do is prevent hyperinflation.

[abbastanza]

Brandon and oil cuts; Brandon and 2mm illegals spending free money; Brandon and Billions to Ukraine; Brandon and inflation reduction act; Brandon and out of control government spending someone else’s money.

[Quentin Quarantino]

Two words: Joseph Robbin’ Hood Biden.

[Principled]

It’s the energy prices stupid.

Energy cost is driving inflation. Until we have lower energy prices, inflation continues.

[Tudorfly]

You win the blue ribbon for the most accurate answer on this thread.

[Republican Wildcat]

WILL THE FED CAUSE A RECESSION? That’s the biggest fear overhanging the economy.

We've already been in a recession (already had 2 quarter of negative growth / contraction - that's a recession) and the Fed didn't cause it and their reactions to the current problems they didn't cause either. Biden and the Democrats and their policies.

[hflynn]

WHAT is ‘an extended period”???

I think one Fed official said "I'm not a gynecologist."

[Obadiah]

Well then, this propaganda article has done what it set out to do. Deflect all blame from Biden, Democrats, and failed Keynesian policy, and obscure those facts with ethereal and mythical unicorn answers. The weak-minded among us are soothed. It’s not Democrats fault. That’s all that matters to them. It’s someone else’s fault.

Ahhh, there. Their fragile senses are restored. They can now go back to their smug moral superiority... and hating Trump.

[SaxxonWoods]

“We are in a recession. They lie.”

Nah, still waiting for the 3 month T-Bill to invert over the 10yr. We are in a slowdown and have inflation. After being completely overamped by spending and giveaway, it certainly feels like a recession, but isn’t. It’s coming though, thank goodness. We need to clean out the excesses and have a lot of work to do yet.

You’ll know when it’s a recession because everyone will be calling it a depression.

[Tellurian]

So at the beginning of 2020, the Federal Reserve (?) added savings accounts' values into the M1 money supply (on top of the checking accounts' values they already lumped in). Odd thing to do ... did they expect everyone to start drawing down their savings?

Well, I'll be a blue nosed gopher. They were right, being that Covid-19 lockdowns struck a couple of months later, and people had to start depleting their savings accounts.

[I want the USA back]

Government created money out of thin air. The main reason for monetary inflation. Per Milton Friedman.

It was biden who presided over this, but he is only doing what he is told. When the true power behind the democrat party decides biden’s time has come, they’ll tell Jill who will break the news as he eats his oatmeal.

I guarantee they have somebody much worse waiting to step into the oval office. Like gavin newsome?

[Scott from the Left Coast]

“ No mention of Brandon, democrats, government spending, government regulations, or the progressives war on energy producers.”

It’s the AP…idiots with keyboards.