Democrats love the sugar high of helicopter drops of money on the economy. They don’t like the 'calories' — the pain of inflation that follows, writes James Rogan. Don’t be fooled; the economy in 2023 won’t be pretty.
Vanessa Correa, left, and Gigi Fiske, right, pass out gallons of milk at a food distribution held by the Farm Share food bank in Miami. Long lines are back at food banks around the U.S. as working Americans overwhelmed by inflation turn to handouts to help feed their families.n Tuesday, the government reported that the headline consumer price inflation rate for August was near zero, 0.1%, on a month-on-month basis. But don’t be fooled into believing that the inflation fight is nearing its end.
The headline report was largely influenced by the fall in gasoline prices over the course of the month. AccordingAAA, at the beginning of August, the average price of gasoline across the country was around $4.21 a gallon. At the end of August, gas prices averaged about $3.80 a gallon. Thus, in August, gasoline prices were down about 8%. As all drivers know, gasoline prices are volatile; moves up and down are transitory.
Two components of inflation that are not transitory are wages and the cost of shelter. Those two inputs to inflation remain very elevated and show no signs of rolling over any time soon. Shelter accounts for aboutThe Federal Reserve Bank of Dallas forecasts housing and rental inflation. Economists for the bank explain that rising house prices have pushed up rent and owners' equivalent rent, or OER, .
By itself, shelter inflation makes it highly probable that, over the next eight months, overall consumer price inflation will remain above 3%. The other input to inflation that will remain very elevated is wage inflation. When wage growth outstrips secular productivity growth,
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