The average cost of a gallon of gasoline in the US has risen to $ 5.014 as grocery costs saw the highest surge in a year since 1979.
Gas prices are up $1.94 from this time last year, spiking 50 cents in the last month alone, according to the AAA Gas Price Index.
The national average passed the $5 mark for the first time in history over the weekend, and President Biden deflected blame for soaring prices to Russia once again.
Meanwhile the cost of groceries rose 11.9 per cent from this time last year, the sharpest increase the country has seen since Jimmy Carter was president.
The Labor Department’s report on Friday showed the consumer price index jumped one percent in May from the prior month, for a 12-month increase of 8.6 percent – topping the recent peak seen in March.
The new figures released on Friday suggested the Federal Reserve could continue with its rapid interest rate hikes to combat what has been coined ‘Bidenflation,’ and markets reacted swiftly, with the Dow shedding around 600 points.
Markets continued to drop during early trading on Monday, as fears of a recession grow stronger.
New data show that annual inflation in the US rose to 8.6% last month. The report led Biden to concede that inflation remains a problem in the US
President Joe Biden speaks to reporters outside of Air Force One on Saturday. He continued to blame Russia and its war in Ukraine for soaring gas prices in the US
The runaway inflation rates are hurting American wallets outside of the gas station, most notably at the grocery store.
Grocery costs have increased at staggering rates, and are expected to only keep climbing as the crisis continues.
The price of eggs has risen 32% and poultry is up 16.6% since the year began, following a bird flu outbreak in January that off roughly 6% of commercial chickens.
Embargoes against Russia have also led to increases in the prices of grain-based foods, while fats and oils are up 16.9%, and milk is up 15.9%.
As inflation-borne production costs climb, producers and retailers alike have indicated that they will be forced to continue hiking prices.
On Monday, Kraft Heinz indicated that they would raise prices on a number of products in August, according to the Wallstreet Journal, with chief of sales Cory Onell saying that the recent inflation was directly to blame for the company’s upcoming price increases.
And there’s no relief to be found in eating out, with the Labor Department report showing that restaurants have increased prices by 7.4% over the course of the year.
The rocketing prices of food have led to consumers switching brands, stores, and altering their buying habits.
The Beige Book report, compiled by 12 regional Federal Reserve banks, shows that people are opting to buy half-gallons of milk instead of full, and that they’re switching to store brands to save on costs.
According to numbers from the Food Industry Trade Group, 35% of consumers are now buying store brands instead of name brands, and 21% are opting for less fresh seafood and meat to try to save on costs.
Speaking to reporters on Saturday, Biden said Russia’s war in Ukraine was the blame for the surge in the cost in the price of oil and gas.
‘It’s outrageous what the war in Ukraine is causing,’ Biden said.
‘We’re trying very hard to make sure we can significantly increase the amount of barrels of oil that are being pumped out of the reserve we have,’ he added.
Biden is facing growing political backlash as high prices increase the pain for American families, who are seeing daily records at the gas pump.
Overall, global oil prices are rising, compounded by sanctions against Russia, a leading oil producer, because of its war against Ukraine.
In addition, there are limits on refining capacity in the US because some refineries shut down during the pandemic.
The combined result is seeing the cost of filling up surging, draining money from Americans who are facing the highest rate of inflation since 1981.
Surveys show that Americans see high inflation as the nation’s top problem, and most disapprove of Biden’s handling of the economy
After the release of the Labor Department’s May numbers, President Biden finally conceded that inflation remains stubbornly high after months of deflecting the issue.
Biden previously claimed that inflation had peaked as far back as December, and tried to strike a hopeful note in more recent months, but his reaction to the May figure struck a more somber tone, while still blaming Vladimir Putin and Republicans in Congress.
‘Today’s report underscores why I have made fighting inflation my top economic priority,’ Biden said in a statement, conceding that ‘it is not coming down as sharply and as quickly as we must see.’
Surveys show that Americans see high inflation as the nation’s top problem, and most disapprove of Biden’s handling of the economy.
Friday’s report underscored fears that inflation is spreading beyond energy and goods whose prices are being driven higher by clogged supply chains and Russia’s invasion of Ukraine.
If the Fed becomes more aggressive in combating inflation with rate hikes, it will mean higher-cost loans for families and businesses, and raises the risk of recession.
‘Virtually every sector has higher-than-normal inflation,’ said Ethan Harris, head of global economic research at Bank of America.
‘It’s made its way into every nook and cranny of the economy. That’s the thing that makes it concerning, because it means it’s likely to persist.’
A top UK economist scolded the Federal Reserve Bank on Sunday, suggesting that the current inflation could have been avoided but for the naivete, or arrogance, of the central bankers who dismissed rising prices as temporary.
‘There was hope initially, that it is transitory, temporary meaning and quickly reversible,’ Mohamed El-Erain, a chief economic advisor to Allianz, said on Face the Nation Sunday. ‘There was hope, as you pointed out, that it had peaked. I never shared those hopes. I think you’ve got to be very modest about what we know about this inflation process. And I fear that it’s still going to get worse, we may well get to 9% at this rate.’
He said that ‘humility is totally called for.’
‘I was very puzzled a year ago when so many people were so confident that inflation was transitory. There was so much we didn’t understand about the post COVID inflation, that humility would have been a good idea,’ he said.
YouTuber-turned-boxer Jake Paul has lashed out at President Biden in a tweet, blaming him for high gad prices, inflation, high rent and plummeting crypto prices
Meanwhile, controversial YouTuber-turned-boxer Jake Paul has joined the chorus of Biden critics, taking to Twitter to air his grievances over the state of the economy.
Paul posted a direct message aimed at Biden in which he listed reasons as to why the country wasn’t doing well and where it was heading.
‘Biden’s accomplishments 1. Highest gas prices 2. Worst inflation 3. Plummeting crypto prices 4. Highest rent prices ever 5. Created new incomprehensible language,’ he began.
Biden’s full statement on May inflation rate
‘Today’s report underscores why I have made fighting inflation my top economic priority. While it is good to see critical ‘core’ inflation moderating, it is not coming down as sharply and as quickly as we must see. 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. 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.
‘My Administration will continue to do everything we can to lower prices for the American people. Congress must act urgently as well. I call on Congress to pass a bill to cut shipping costs this month, and get it to my desk, so we can lower the price of goods. And, I call on Congress to pass legislation to cut costs for families like energy bills and prescription drugs. The deficit has come down more under my watch as President than at any time in history, but if Congress would pass tax reform to make the wealthiest Americans and big corporations pay their fair share, we could reduce this inflationary pressure even more. These are the most significant things Congress can do to help families now and complement the Federal Reserve’s efforts to bring inflation down.
‘Prices at the pump are a major part of inflation, and the war in Ukraine is a major cause of that. The United States is on track to produce a record amount of oil next year, and I am working with the industry to accelerate this output. But it is also important that the oil and gas and refining industries in this country do not use the challenge created by the war in Ukraine as a reason to make things worse for families with excessive profit taking or price hikes. We all have work to do to get inflation down. What will not help is the plan by some Republicans in Congress to raise taxes on the middle class and working families. That would be a step in the wrong direction, and I strongly oppose it.