Inflation did not get any better in October. In fact, it got worse. The Consumer-Price Index rose at a 6.2% annual rate.
The rise was driven by pandemic-related supply shortages and strength in consumer demand.
Worse yet, the core price index which excludes food and energy prices rose at 4.6% in October. In September it rose at 4%. The 4.6% rise is the largest increase in the core price index since 1991.
Context: The rising cost of consumer goods is broadening. The pain in the grocery store and at the pump has extended to autos, energy, furniture, rent, and medical care.
However, some prices did fall, airlines fares and alcohol.
Why this is important: The increased prices could mean a tough winter for the Biden White House as the president battles plummeting approval ratings.
More worrisome is the increased cost of the holidays. As a result, the chances of the Democrats holding on to the slim margins in the House and Senate decreases.
Currently, Biden’s approval rating sits at 38% with 46% of Americans saying that Biden is worse than expected.
What they are Saying:
Laura Rosner-Warburton, senior economist at MacroPolicy Perspectives says “I do think we’re moving into a new phase where inflation is broader and where things are going to get a little more intense… Part of that reflects that [supply-chain] bottlenecks are not resolved going into the holiday season, when a lot of purchases get made, and that the economy is doing really well, so you have strong demand.”