Don’t get too excited over one good inflation report. So advised a Bloomberg news headline after the November Consumer Price Index came in a little lower than the previous month!
Everywhere people crowed. Biden and his economic team rushed to the cameras to take credit. “What is clear is my economic plan is working and we’re just getting started,” Biden said.
On average, consumer prices paid by the American people have risen 13.8 percent since Biden took office. Higher prices are costing the average family $5,800 per year according to the Heritage Foundation. To that higher interest rates must be added. The average cost of interest rates per family is $1,300, for a total yearly hit of $7,100 under Biden.
The CPI for the 12 months through November was up 7.1 percent. 7.1 percent is down from 7.7 the month before, and down from 9.1 percent in June.
But before anyone gets too excited about a better month, let us take a deep breath and remember that inflation is not like a light switch that can be turned on or off. The rate of inflation cannot be fine-tuned. The economy is not mechanical, and prices cannot be engineered by a central authority.
Perhaps some of our readers are old enough to remember the way inflation rose and fell and rose again during the stagflation decade of the 1970s. This chart captures the annual CPI rates as they were reported during that period. You can see inflation came in waves.
Price inflation climbed to 10 percent and beyond in 1974, dipping to 5 percent in 1976, before surging to almost 15 percent in 1980.
We wish it were not so, but a couple of good months don’t mean the inflation monster has been slain.