Groundwork’s Rakeen Mabud Reacts to February CPI

Groundwork’s Rakeen Mabud Reacts to February CPI

Today, the Bureau of Labor Statistics released the February CPI report which showed prices rose 0.4% last month and 3.2% over the last year. Housing and gasoline prices together accounted for 60% of the monthly increase in prices. Higher interest rates have pushed mortgage rates to 20-year highs over the last two years. Groundwork’s Chief Economist Rakeen Mabud reacted with the following statement:

“The Fed’s high interest rates are pushing up costs for families, including housing costs. The Fed’s actions are exacerbating a long-standing housing shortage by making it more expensive to build new homes.”

Email press@groundworkcollaborative.org to speak with one of Groundwork’s experts about today’s CPI report.

Background

• Mortgage rates at 20-year highs over the last two years are posing a significant barrier to prospective homeowners. The high interest rates also raise costs for builders, which hinders our progress toward addressing our shortage of 3.2 million homes.
• In a new blog post, Groundwork’s Clara Wilson dives into the Federal Trade Commission’s block of the Kroger-Albertsons merger and why it’s a crucial move to prevent future spikes in food prices by preventing even more consolidation in the food supply chain.
• Last week, Groundwork found that shrinkflation is responsible for as much as 10% of inflation in key product categories, like paper products and snacks. The report makes clear that “shrinkflation,” also known as “price pack architecture,” is playing a crucial role in growing profit margins while shortchanging consumers, with executives citing outrageous gimmicks like portion control and reducing emissions as excuses for ripping off consumers.
• Last month, Groundwork released a report that found families are now paying 25 percent more for groceries than they were prior to the pandemic, compared to 19 percent overall inflation. The report offers policy recommendations to reduce the risk of future grocery price spikes, such as investigating the use of slotting fees that require product manufacturers to “pay to stay” on shelves and scrutinizing anti-competitive mergers throughout the food supply chain.
• In January, Groundwork found that from April to September 2023, corporate profits drove 53% of inflation. Comparatively, over the 40 years before the pandemic, profits drove just 11% of price growth.