Latest Inflation Data is BAD NEWS for Joe Biden

From the moment that Joe Biden took office, there have been concerns regarding his ability to manage the American economy.  And, unfortunately, it appears as those these worries were warranted.

Now, even after months of criticism, the White House doesn’t seem to have the situation under control, despite the abject confidence oozing from the West Wing.

Inflation turned higher to start 2023, as rising shelter, gas and fuel prices took their toll on consumers, the Labor Department reported Tuesday.

The consumer price index, which measures a broad basket of common goods and services, rose 0.5% in January, which translated to an annual gain of 6.4%. Economists surveyed by Dow Jones had been looking for respective increases of 0.4% and 6.2%.

Excluding volatile food and energy, the core CPI increased 0.4% monthly and 5.6% from a year ago, against respective estimates of 0.3% and 5.5%.

The key areas of trouble were doubly concerning.

Rising shelter costs accounted for about half the monthly increase, the Bureau of Labor Statistics said in the report. The component accounts for more than one-third of the index and rose 0.7% on the month and was up 7.9% from a year ago. The CPI had risen 0.1% in December.

Energy also was a significant contributor, up 2% and 8.7%, respectively, while food costs rose 0.5% and 10.1%, respectively.

Rising prices meant a loss in real pay for workers. Average hourly earnings fell 0.2% for the month and were down 1.8% from a year ago, according to a separate BLS report that adjusts wages for inflation.

According to the New York Federal Reserve‘s barometer, which is based on the spread between 3–month and 10–year Treasury yields, the probability of a recession in the next 12 months is the highest it‘s been since the early 1980s, with a figure of 57.1%.