Biden can blame whoever he wants for the rampant inflation we’re seeing under his watch, but his protestations that it’s Putin’s fault don’t change the fact that prices are rising for ordinary Americans.
And it’s just the ordinary inflation rate, the Consumer Price Index (CPI) that we normally hear about. That metric, thanks to some “tweaking” of the metrics in the 90s for budget purposes, is widely regarded as being a good bit lower than the actual inflation rate.
So, it’s useful to look at other metrics to see what the real inflation rate might be, or at least what level of inflation we could see in the CPI as costs get passed on to consumers.
One such metric is the Producer Price Index, which the Conservative Treehouse describes as the “tracking of wholesale prices at three stages: Origination (commodity), Intermediate (processing), and then Final (to wholesale).”
So, if you want to see what inflation rate the companies producing the goods you’re having to buy at ever-higher prices have to deal with, and thus what the consumer inflation rate could be if those companies decide to keep profits steady by passing the increased costs on to consumers, the PPI is a reasonably good place to start.
Well, according to the Bureau of Labor Statistics, the PPI has risen by a whopping ten percent in the past twelve months, including large 0.8% and 1.2% increases in February and January, respectively. In its words:
The Producer Price Index for final demand increased 0.8 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This rise followed advances of 1.2 percent in January and 0.4 percent in December 2021. (See table A.) On an unadjusted basis, final demand prices moved up 10.0 percent for the 12 months ended in February.
Then, describing what boosted the PPI inflation rate rose so much in February, it placed the blame mainly on “final demand goods” saying:
In February, the advance in the index for final demand can be attributed to prices for final demand goods, which rose 2.4 percent. The index for final demand services was unchanged.
Prices for final demand less foods, energy, and trade services rose 0.2 percent in February following a 0.8-percent increase in January. For the 12 months ended in February, the index for final demand less foods, energy, and trade services moved up 6.6 percent.
And why was the final demand goods section such a problem? Fuel, mainly, particularly gasoline. Again according to the Bureau of Labor Statistics:
Nearly 40 percent of the February increase in prices for final demand goods can be attributed to the index for gasoline, which rose 14.8 percent. Prices for diesel fuel, electric power, jet fuel, motor vehicles and equipment, and dairy products also advanced.
Biden can try to blame whoever he wants for the price increases, particularly the massive jump in the price of gasoline. But it won’t work; he’s the president and, rightly or wrongly, Americans see him as being responsible for the economic situation they’re experiencing.