May CPI set a new recent record for inflation

by Erik Randolph | Jun 10, 2022

May CPI set a new recent record for inflation

Key Points

May the Consumer Price Index (CPI) set new record for inflation
Lack of discussion over the price level, which is the new ‘floor’ for prices in the economy
Leaving the price level elevated means we are leaving the economically disadvantaged further behind, exacerbating the economic divide in our nation

New record for inflation

Today, the U.S. Bureau of Labor Statistics announced that in May the Consumer Price Index (CPI) rose by 1%, not seasonally adjusted. Year over year, the CPI has gone up 8.6% in the last 12 months. The May CPI exceeded expectations and set a new recent record for inflation.

The Georgia Center for Opportunity’s (GCO) take: “We now know that the early statements from the Biden Administration and the Federal Reserve that this inflation is transitory was an incorrect assessment. It looks a lot more like it’s becoming embedded into the economy,” said Erik Randolph, GCO’s director of research. “What’s both remarkable and troubling is the lack of discussion over the price level, which is the new ‘floor’ for prices in the economy. The only discussion is about bringing the inflation rate back down. This means that the federal policymakers are willing to leave the price level elevated. Leaving the price level elevated means we are leaving the economically disadvantaged further behind, exacerbating the economic divide in our nation.”

Georgia House subcommittee to examine recruiting and retention challenges for state’s workforce | Jackson Progress-Argus

by Corey Burres | May 24, 2022

Georgia House subcommittee to examine recruiting and retention challenges for state’s workforce | Jackson Progress-Argus

A new state House subcommittee plans to examine the Georgia workforce’s challenges in recruiting and retaining talent…

Meanwhile, the Georgia Center for Opportunity has joined the Texas Public Policy Foundation and Louisiana’s Pelican Institute for Public Policy to create the Alliance for Opportunity. The group will explore the issue and develop recommendations to reduce the number of people in poverty.

“A subcommittee is a good first step but there aren’t any set deadlines yet for the committee so we will see where it goes,” Corey Burres, vice president of communications for the GCO, told The Center Square.

“The key is to understand that work is the solution to poverty. It helps communities and individuals thrive and find dignity,” Burres added. “As long as the system and policies work to drive that goal home, only good can come out of it.”

Read the full article here

Reality is Likely to be Far Less Rosy

by Erik Randolph | May 16, 2022

Reality is Likely to be Far Less Rosy

Reality is likely to be less rosy…

Some economists are hoping that inflation has peaked and will tick down in the coming months, after the pace of inflation slowed slightly in April. But Erik Randolph, director of research for the Georgia Center For Opportunity (GCO), warns that the reality is likely to be far less rosy.

“What we saw with the April Consumer Price Index was disinflation. That means the rate of inflation decreased but inflation is still occurring and our purchasing power is declining,” Randolph said. “Meanwhile, wage increases are lagging behind price increases. The vast majority of workers will have lower standardsof living because their budgets will not buy as much as in the recent past. Some workers will get handsome pay raises, but they will be the exception rather than the rule.

What’s needed?

“The core problem here is that the price level has risen, setting a new floor for costs. The only way to lower the price level, by definition, is to allow for deflation. But our policymakers are afraid of deflation because of the economic schools of thought that they adhere to. What is needed is new economic thinking in Washington, D.C. from economists who are not afraid of deflation but recognize it’s the only way to bring the price level down that benefits the most people. The mess we’re in now are the signs of stagflation, meaning the rising price level may be soon accompanied with slower economic growth and loss of employment. The only way to mitigate that scenario would be to adopt policies to allow for supply-side growth.”

Experts say Georgia policymakers should remove governmental barriers to job creation | The Center Square

by Corey Burres | May 16, 2022

Experts say Georgia policymakers should remove governmental barriers to job creation | The Center Square

As the Consumer Price Index continues to rise, a Georgia nonprofit says the state should remove barriers to jobs to facilitate business growth.

The non-seasonally adjusted CPI rose 0.3% in April and has increased 8.3% in the last 12 months…

“Economics 101 teaches that increasing supply means both lower prices (lower inflation) and more employment and economic growth,” Randolph added. “Increases in demand have a trade-off between prices and employment/growth. Therefore, anything state governments can do to facilitate job growth and business growth will help mitigate inflationary pressures. In other words, enhancing the productive capacity increases supply, putting downward pressure on prices.”

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Inflation slowed in April, but prices continued their steady increase | KTBS

by Corey Burres | May 11, 2022

Inflation slowed in April, but prices continued their steady increase | KTBS

Inflation continued its steady rise in April, when the Consumer Price Index increased 8.3% over last year, according to data released Wednesday by the U.S. Bureau of Labor Statistics.

For the month, the CPI rose 0.3%. That’s down from the 1.2% spike in March, but higher than analysts expected. The 8.3% increase over last year remains near 40-year highs, the bureau reported…

The Georgia Center for Opportunity’s welcomed the slowed inflationary number, but said supply issues continue to drive up costs for everyone.

“The fact that inflation ticked down in April is welcome relief, but the rate is still higher than what economists predicted and is still running super hot,” Erik Randolph, GCO’s director of research, said in a statement. “A contributing cause to inflation is disruptions on supply. … Economics 101 teaches that increasing supply means both lower prices (lower inflation) and more employment and economic growth. Increases in demand have a trade-off between prices and employment/growth. Therefore, anything state governments can do to facilitate job growth and business growth will help mitigate inflationary pressures. In other words, enhancing the productive capacity increases supply, putting downward pressure on prices.”

Read the full article here