Wholesale prices jumped 9.7% in January as inflation continues to be red hot. Producers thought it would go up 5%. Household debt soared by $1 trillion and if it continues, it will put our GDP at risk.
Fuel is up to $3.65 – $4.29 a gallon in New York, home energy is rising, and Biden is destroying the energy sector.
The Labor Department said Tuesday that its producer price index, which measures inflation at the wholesale level before it reaches consumers, surged 9.7% in January from the year-ago period, slightly below the 12-year high of 9.8% notched in November and December. But on a monthly basis, prices rose 1% in January – well above the revised gain of 0.4% in December, Fox Business reports.
Household Debt Soars by $1 Trillion
Household debt rose by $1 trillion, the highest jump since 2007. Americans accumulated an additional $1 trillion in debt, with the figure growing by $233 billion in the fourth quarter alone. Mortgage debt saw a significant increase while rising car prices drove the numbers higher.
Mortgage debt rose to $10.93 trillion for the quarter, driven by the record number of home loan originations.
In the meantime, auto loans drove household debt as they grew by $84 billion in 2021 and by $15 billion for the quarter with newly opened auto loans reaching $734 last year —the biggest number on record and totaling $1.46 trillion. This was driven by the high price of cars and the scarcity of cars available.
The International Monetary Fund warned that high household debt hinders long-term GDP growth:
“Our study found that a 5 percentage-point increase in the ratio of household debt to GDP over a three-year period forecasts a 1.25 percentage-point decline in inflation-adjusted growth three years in the future. Higher debt is associated with significantly higher unemployment up to four years ahead. And a 1 percentage point increase in debt raises the odds of a future banking crisis by about 1 percentage point. That’s a significant increase when you consider that the probability of a crisis is 3.5 percent, even without any increase in debt,” the IMF stated in a report released in 2017.
In the short term, it provides a boost, but as inflation continues and debt rises, it puts the nation’s GDP at risk.
Highest Unemployment in Dem States
- Hawaii – 9%
- New York – 8.5%
- New Mexico – 8.3%
- Connecticut – 8.3%
- California – 8.3%