(IntegrityTimes.com) – President Biden’s Inflation Reduction Act does not seem to be living up to its name, as inflation is on the rise yet again. February marked a 3.2 percent inflation rate, which could lead to doubts from the Federal Reserve regarding expected cuts to interest rates.
The Consumer Price Index, which keeps track of price changes for goods and services, was one tick higher than economists predicted. Since President Biden took office, there has not been a decrease in prices year-over-year. Prices are still up by 19 percent since one month before Biden’s inauguration.
Despite this, Biden continuously claims that Bidenomics has helped reduce the deficit, although it has doubled in the last year. Prices have gone up 0.4 percent higher than in January, mainly due to shelter and gasoline indexes. Core CPI dropped 0.1 percent since the new year began. Core CPI does not include the price of energy prices and “volatile food.” The 3.8 percent figure was still 0.1 percent higher than economists projected. Central bankers have long said that the goal was to decrease inflation to 2 percent but have had little success thus far. Investors have also banked on at least one interest rate cut from the Federal Reserve by the end of June.
The Bureau of Labor Statistics said that the CPI increase was due to the rise in airfare, insurance for motor vehicles, as well as apparel and recreational activities. Some relief occurred in the cost of household furnishings and person care indexes. February’s food index did not change, but there was a 0.1 percent increase in the food away from home index.
One sign of the potential slowing of the economy was the increased unemployment rate. It rose to 3.9 percent from 3.7 percent, where it had stayed for three months. This could make the case for interest rate cuts, hopefully by June. Job numbers blew past economists’ expectations of 198,000, Payrolls instead increased by 275,000, according to the Department of Labor. Wages were also up by five cents.
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