The Consumer Price Index rose 8.2 percent in September, leading to continued rising prices for American consumers and signs that inflation continues to impact the U.S. economy.
The report showed a mixed bag of increases, with the cost of rent continuing to rise along with food prices. One positive for our wallets? Gas prices slightly dropped.
The news comes just weeks before the midterm elections, where Republicans across Kentucky have been running on increased prices as a reason to elect them on Nov. 8.
Though Republicans hold a supermajority in both the Senate and House in Kentucky, they have placed national politics into local races by placing the blame on Democrats, Joe Biden, and Gov. Andy Beshear.
But Rep. Buddy Wheatley (D-Covington) said the economy and inflation are multifaceted, so it’s tough to place blame on any one policy or political party – anybody who does place blame is just “blowing smoke,” he said.
Politicians should focus on fixing the problem through the factors that cause inflation, such as tax policy and improving struggling areas in the private sector, he said.
“The important part of it is to have the right mix (of policy),” Wheatley said at the annual legislative luncheon for the Covington Business Council.
Kentucky, though, has reported strong economic numbers. The August jobs report showed that the state gained more than 26,000 jobs between July and August, which was the largest job growth in the nation.
At the Business Council luncheon, Kentucky Senate Majority Floor Leader Damon Thayer (R-Georgetown) was quick to take credit for the positive economic markers happening in the state and the potential for further economic improvement through the removal of the state’s income tax – something the Republican legislature passed in the 2022 legislative session.
“Republicans cut your taxes. Andy Beshear vetoed it. We overrode the veto,” Thayer said of the legislation to cut income tax. “So when that tax cut goes into effect, and he tries to take credit for the positive economic results coming from that, just remember he had nothing to do with it. Republicans cut your taxes. That’s a fact.”
Democrats and Republicans are quick to accept credit for the positive aspects of the state’s economy and job growth, but when it comes to inflation, they tend to point fingers.
But, inflation is complicated arithmetic, according to Dr. Will Snell, a professor in the College of Agriculture, Food and Environment at the University of Kentucky. Snell testified to the Interim Joint Committee on Agriculture in June about inflation.
“Inflation is measured, as most of you all know, by the Consumer Price Index,” Snell said. “What you may not know is CPI is actually a basket of market goods that certainly includes things such as food prices in cars and the price of gasoline. But it’s actually a gauge of 80,000 different goods and services.”
The arithmetic involving inflation and CPI is complicated and isn’t due to one thing – it’s a combination, according to Snell. The things that affect inflation include government spending, labor supply issues, supply chain disruptions, monetary policy, weather/disease events, and the war in Ukraine.
“The past couple of decades or so, we have not had much inflation,” Snell said. “I tell my students pretty much throughout their entire lifetime, they’ve not experienced much inflation.”
