July, 13 2022, 10:52am EDT
Groundwork's Dr. Rakeen Mabud Responds to Latest Inflation Report
Today's Consumer Price Index (CPI) shows year-over-year inflation at 9.1%, driven by rising energy costs. Groundwork's Chief Economist Dr. Rakeen Mabud reacted with the following statement:
"This morning's report highlights the fact that aggressive interest rate hikes by the Fed have done little to combat the inflation that continues to take a toll on workers, families, and small businesses across the country. Additional rate hikes would push millions out of work and further raise the risk of a recession that would only worsen economic pain.
WASHINGTON
Today's Consumer Price Index (CPI) shows year-over-year inflation at 9.1%, driven by rising energy costs. Groundwork's Chief Economist Dr. Rakeen Mabud reacted with the following statement:
"This morning's report highlights the fact that aggressive interest rate hikes by the Fed have done little to combat the inflation that continues to take a toll on workers, families, and small businesses across the country. Additional rate hikes would push millions out of work and further raise the risk of a recession that would only worsen economic pain.
"Policymakers must tackle inflation at its source: by addressing the rampant corporate profiteering and snarled supply chains that are causing significant financial hardship across the country."
Email press@groundworkcollaborative.org to speak with Dr. Mabud about today's CPI report and visit endcorporateprofiteering.org to see our latest research.
The latest inflation news and research:
- Smerconish: Throwing Millions of Americans Out of Work Won't Fix Inflation. "In order to do what's necessary to stop inflation," (Summers) said. "The Fed is going to raise interest rates enough that the economy will slip into recession." When a so-called solution to inflation involves making countless workers and their families worse off, it is not a solution. It's just cruel. It reflects a fundamental misunderstanding of why prices are rising in the first place.
- ProPublica: What's Really Driving Inflation? The prices of gas, meat, and housing in particular have dramatically increased. But while consumer spending power has weakened, some corporations are seeing increased profit margins, especially those in highly concentrated industries. At this event, ProPublica brought an accountability lens to the inflation conversation, provided broader context on current economic conditions and illuminated potential solutions with a panel of experts, including Dr. Rakeen Mabud, chief economist and managing director of policy and research at the Groundwork Collaborative.
- HuffPost: The Federal Reserve Can't Fix Supply Problems, But It Can Make People Poorer. "By slowing demand too aggressively, they could very well cause an economic downturn and get a lot of people fired and make people poor, make families poor, even though they're already struggling from rising prices," Jin Woo Chung, senior economist at the progressive think tank Groundwork Collaborative, said in an interview.
- Federal Reserve Bank of San Francisco: How Much Do Supply and Demand Drive Inflation? Supply factors explain about half of the difference between current 12-month PCE inflation and pre-pandemic inflation levels, and the effects appear to be rising more recently. Demand factors are responsible for about a third of the difference, and those effects appear to be diminishing more recently.
- Roosevelt Institute: Prices, Profits, and Power: An Analysis of 2021 Firm-Level Markups. Markups and profits skyrocketed in 2021 to their highest recorded level since the 1950s. Further, firms in the US increased their markups and profits in 2021 at the fastest annual pace since 1955. There are broad markup increases across many types and sizes of firms, suggesting the influence of demand, and a historically unique movement of markups between industries, suggesting a supply story.
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The Groundwork Collaborative is dedicated to advancing a coherent and persuasive progressive economic worldview and narrative capable of delivering meaningful opportunity and prosperity for everyone. Our work is driven by a core guiding principle: We are the economy. Groundwork Collaborative envisions an economic system that produces strong, broadly shared prosperity and power for all people, not just a wealthy few.
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