Inflation is soaring, and Joe Biden’s build back better agenda is likely to cause more price increases.
According to the Labor Department, it’s producer price index rose by 9.6% opposed to last November, the sharpest increase since 2010. Wholesale prices went up by 0.8% last month alone.
The consumer price index on the other hand, rose by 6.8% as opposed to the previous November. This is the sharpest yearly increase in almost 40 years.
Reuters reported, The report from the Labor Department on Tuesday, which also showed strong growth in underlying producer inflation, followed on the heels of news last Friday that annual consumer prices surged by the most since 1982 in November. Soaring inflation complicates President Joe Biden economic agenda, including a $1.75 trillion social policy and climate bill stuck in Congress.
As Joe Biden attempts to pass his $1.75 trillion bill, Senator Joe Manchin from West Virginia insists that the bill will only cause more price increases.
The Biden Administration claims that “No economist out there is projecting that the Bill will have a negative impact on inflation.” In reality, most economists are arguing that it will have some negative effect even if that effect is brief.
“We know there’s lots of spending in the bill, and that it’s front-loaded if you cut taxes and increase spending, financed by debt, that will put upward pressure on inflation.” Said economist Douglas Holtz-Eakin on the bill.
Michael Feroli, Chief economist for JPMorgan said that, “Right now, anything that expands aggregate demand is not warranted, not advisable. The economy seems to be operating pretty close to its capacity constraints.”
Other economists expect that the bill will push inflation upwards but only slightly and for a very short period.
