The “surprise” reappearance in July of inflation in the depressed U.S. economy is the work of your needs-to-be-nationalized Federal Reserve Bank. During the period of extraordinarily high levels of quantitative easing by the Fed since March (i.e., buying securities at inflated prices from big banks with newly printed money), peaking at $500 billion/month and still continuing now at about $30 billion/week, the U.S. dollar has lost about 10% of its late 2019 value against other major currencies. With Treasury and Fed combined “relief” also driving unusual increases in spending by better-off consumers despite mass unemployment, inflation in June and July replaced the price deflation of the previous three months.
Inflation of consumer prices has officially registered 0.6% in each of June and July despite real unemployment of 30 million. Taking the year-to-year figures in the Consumer Price Index report released Aug. 12: CPI-U overall is up 1.6% in a year; food prices up 4.1%; medical care services up 5.9%; rent up 3.2%, and shelter overall up 2.3%; energy prices, however, were down 11.2%. Producer prices, which were reported Aug. 11, also rose by 0.6% in July.
