Wednesday, May 22, 2024

Gas, vehicle and other prices soar as inflation continues

by BIZ Magazine

By Casey Harper | The Center Square

Consumer prices continued their rise in July as a new federal report released Wednesday shows the highest U.S. inflation in years.

The Bureau of Labor Statistics data found that the consumer price index for urban consumers rose half a percentage point in July, after rising nearly an entire percentage point in the month of June. These spikes in inflation have contributed to the 5.4% increase in inflation in the last 12 months, well above the increase in 2020, which was a little more than 1%.

The major spike in inflation has concerned some economists and raised questions about increased federal spending.

“The all items index rose 5.4 percent for the 12 months ending July, the same increase as the period ending June,” BLS said. “The index for all items less food and energy rose 4.3 percent over the last 12 months, while the energy index rose 23.8 percent. The food index increased 3.4 percent for the 12 months ending July, compared to a 2.4-percent rise for the period ending June.”

The report means goods and services have become increasingly expensive for Americans even as they struggle to recover from the economic hardship of the pandemic.

“The indexes for shelter, food, energy, and new vehicles all increased in July and contributed to the monthly all items seasonally adjusted increase,” BLS said. “The food index increased 0.7 percent in July as five of the major grocery store food group indexes rose, and the food away from home index increased 0.8 percent. The energy index rose 1.6 percent in July, as the gasoline index increased 2.4 percent and other energy component indexes also rose.”

This latest report comes after the BLS showed that in June the consumer price index saw the largest spike since the 2008 financial crisis.

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9 percent in June on a seasonally adjusted basis after rising 0.6 percent in May…” BLS said. “This was the largest 1-month change since June 2008 when the index rose 1.0 percent. Over the last 12 months, the all items index increased 5.4 percent before seasonal adjustment; this was the largest 12-month increase since a 5.4-percent increase for the period ending August 2008.”

Vehicles have been a particularly large source of price increases.

“The index for used cars and trucks increased 41.7 percent over the span,” BLS said. “The index for new vehicles rose 6.4 percent, the largest 12-month increase since the period ending January 1982.”

Energy prices have also skyrocketed, increasing 23.8% in the last 12 months, driven largely by a 41.8% increase in gas prices.

“The index for natural gas rose 19.0 percent over the last 12 months, while the index for electricity increased 4.0 percent,” BLS said.

The inflation data comes the same day Senate Democrats passed a $3.5 trillion budget resolution, drawing criticism from Republicans who say runaway government spending is to blame for higher prices since increased federal debt is dealt with by printing more currency.

“Democrats are engaged in a $9.5 TRILLION spending spree,” Sen. Ted Cruz, R-Texas. wrote on Twitter. “This week, they’re spending nearly $5 TRILLION…$1,200,000,000,000 ‘infrastructure’ bill…$3,500,000,000,000 Bernie budget resolution. Our country is facing an inflation bomb, due in part to the Democrats’ money printing.”

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