Thursday, May 5, 2022

"The Cost of Living Crisis Of 2022 Is Now Worse Than Anything That We Ever Experienced"

Full screen recommended.
"The Cost of Living Crisis Of 2022 Is Now Worse 
Than Anything That We Ever Experienced"
by Epic Economist

"The inflation crisis of 2022 has escalated to a level that is beyond anything we’ve ever witnessed, even surpassing the horrible cost of living crisis experienced during the Jimmy Carter era of the 1970s. In the early 1980s, the inflation rate hit a record high of 14.6%. A couple of weeks ago, we learned that the official rate of inflation in the U.S. hit 8.5% in March, the highest level since the early days of the Reagan administration, according to Labor Department data. But when we make an apples-to-apples comparison, calculating the rate of inflation the way it was originally calculated, the official rate of inflation would be somewhere around 17% right now. This means that the cost of living in this country has risen 17% in less than two years. By comparison, in “normal” times, a healthy inflation rate would be somewhere between 2.5 to 3.5%. This leaves us with the highest living expenses and consumer prices ever recorded in the entire history of America.

The price of gasoline has risen by 48% from March 2021 to March 2022, according to numbers released by the Bureau of Labor Statistics. In just one month - from February to March - the seasonally adjusted price of gasoline jumped by 18.3%. At the same time, we’re seeing vehicle prices climb to absurd levels as the auto industry scrambles to fight against factory shutdowns, shortages, and shipping disruptions. However, all across the board, US manufacturers are reporting that inflation is out of control, and it hasn’t peaked, but intensified in the past quarter.

“Firms continued to pass higher material and staff costs on to clients in April, as the rate of charge inflation accelerated. The increase in selling prices was the fastest since last October,” the PMI report says. So when we think we’ve already seen the worst of inflation, we’re told that more price hikes happened all across the industry last month, and soon they will hit the stores.

As the cost of living crisis bites, consumer prices have already been causing a lot of pain. If you think paying $10 for a pound of bacon or $6 for a pound of butter is way too much, we’re sorry to say but it's about to get even more expensive. In a few weeks, you'll be paying a lot more for just about everything when it comes to eating in or dining out, according to the U.S. Department of Agriculture. "All food prices are now predicted to increase," the USDA's Food Prices Outlook for 2022 March report said.

And that's on top of all the other increases consumers faced over the past several months. Before the health crisis, it would be inconceivable that so many Americans would be experiencing food insecurity all of a sudden. But this tragic situation illustrates the kind of nightmare scenario that is now upon us. Sadly, economic conditions will continue to rapidly deteriorate. And if another black swan event hits us later this year, it wouldn’t take much at all to push our nation over the edge and into an unprecedented economic crisis of catastrophic proportions. We’re rapidly transitioning from stagflation to a full-blown economic recession, and the consequences of it are going to be devastating."

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