The levels of inflation for businesses are still quite elevated as the Producer Price Index (PPI) went up almost 10.8% from May 2021 to May 2022, stated a Tuesday morning report from the U.S. Bureau of Labor Statistics.
This rise in the index was pushed, for the most part, by increasing energy costs which spiked by almost 5% throughout the month of May, and overall transportation costs which went up by almost 3%– a phenomenon that happened as the costs at the pump continues to break records and go past the national average of $5 per gallon.
“Businesses are being forced to raise prices, or succumb to shrinkflation, as transportation of goods goes up,” stated Alfredo Ortiz, the CEO of the Job Creators Network. “All of this leads to Americans becoming poorer than ever.”
This news comes just a scant few days in the wake of the Bureau of Labor Statistics announcing that the Consumer Price Index (CPI) spiked by 8.6% over the same period, which caused it to hit a brand new forty-year record. As is the case with businesses, consumers are also hard-pressed by the spiking energy prices — fuel oil, gasoline, utility gas service, and electricity costs rose by 107%, 49%, 30%, and 12% year-over-year, respectively. In the same vein, the economy in almost its entirety is dealing with a shortage in both new and used vehicles, which has caused the prices fo each to spike by 13% and 16% respectively.
As businesses begin to deal with these increased costs, they are forced to pass on a percentage of these increased costs to the consumer in order to main a profitable status, which then further raises prices for the American household.
“Biden has created an economic mess,” added Ortiz. “He dug this hole with reckless government spending and regulations, now the economy is spiraling, and the hole is digging itself deeper even with Biden’s inaction.”
As we have seen, President Joe Biden has been trying to throw the blame for all of these problems at the feet of Russian President Vladimir Putin and his invasion of Ukraine.
“Putin’s Price Hike hit hard in May here and around the world: high gas prices at the pump, energy, and food prices accounted for around half of the monthly price increases, and gas pump prices are up by $2 a gallon in many places since Russian troops began to threaten Ukraine,” Biden claimed in a release. “Even as we continue our work to defend freedom in Ukraine, we must do more — and quickly — to get prices down here in the United States.”
Biden also tried to call for Congress to “make the wealthiest Americans and big corporations pay their fair share” and thereby “reduce this inflationary pressure even more.”
The recent horrible news about inflation has since triggered a selloff this past Monday on Wall Street. A 3% drop was observed in Dow Jones Industrial Average, a 4% drop for the S&P 500, and a 4.7% drop for the Nasdaq. Similarly, last week the Dow fell 2.7%, the S&P fell 2.9%, and the Nasdaq fell 3.5%.
The Biden administration has taken to deflecting the blame for the recent poor performance of the stock market.
“So, as you know, we are watching — we’re watching closely,” claimed White House Press Secretary Karine Jean-Pierre when questioned about the freefalling prices for assets. “We know families are concerned about inflation and the stock market. That is something that the President is — is really aware of. And so, look, we face global challenges. We’ve talked about this. This is — we’re not the only country dealing with what we’re seeing at the moment as it relates to inflation.”
At that point, Jean-Pierre attempted to argue that the $1.9 trillion American Rescue Plan from the Democrats led to a “historical economic boom,” especially when talking about the labor market. Despite unemployment being relatively low and nominal wages seeing a slight increase between May 2021 and May 2022, real wages fell by 3% due to the more rapid inflation rate.