Inflation’s latest victim is soaring electric bills, but here is an even bigger problem.
INFLATION’S LATEST VICTIM: U.S. ELECTRIC BILLS
May 11 (King World News) – Gerald Celente: Electric bills nationwide have risen an average of 8 percent over the past 12 months, the U.S. energy department reported, with rates in Florida, Hawaii, Illinois, and New York spiking as much as 15 percent.
In the first two months of this year, electricity’s price averaged 14 cents per kilowatt-hour (kW) nationwide. It hit 25 cents in Massachusetts and 38 cents in Hawaii, the highest in the nation.
Bills are rising in tandem with the cost of natural gas, which fuels about 40 percent of the country’s electricity generating plants.
Gas shortages in Europe began last fall, sending prices soaring, as we detailed in “High Natural Gas Prices Slow Europe’s Recovery” (14 Sep 2022).
Since then, the Ukraine war has driven gas prices even higher. The West has not banned Russia’s gas, but the U.S. has committed to ship more liquefied natural gas to Europe, kicking domestic prices higher.
Natural gas prices have as much as tripled in some places, compared to the price less than a year ago when a gas glut scuttled the U.S. market.
Electricity’s price also has climbed as parts and equipment to repair and maintain the electric grid have become more expensive. (See related story in this issue.)
Costs will continue to rise, not only alongside fuel prices, but also because utility companies will need to invest hundreds of billions of dollars in the years ahead to upgrade the electric infrastructure and harden it against threats ranging from cyberattacks to extreme weather events, The Wall Street Journal noted.
A year from now, the typical electric rate will be 15 cents per kW, or about $150 a month for households burning 1,000 kW per month, the U.S. Energy Information Administration has calculated.
Renewable energy is unlikely to offer much relief, the WSJ noted: after falling for years, the cost of solar panels and wind turbines is rising again due to supply chain clogs…
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Inflation Beats Out Wages
U.S. wages rose 5.5 percent in April, year over year, while inflation sped at an annual rate of 8.5 percent during the 12 months ending 31 March, the U.S. labor department reported.
In contrast, wages grew by an average of 3.4 percent in the six months preceding the COVID onset in February 2020.
Rising wages are a key driver of inflation, because employers often must raise product prices to cover higher labor costs.
However, there are signs the surge in wages may be easing.
April’s gain was just 0.3 percent from March; February’s increase was 0.1 percent, as we reported in “Wage Growth Slows” (5 Apr 2022). The two months showed the slowest wage gains in the last eight.
Also, the U.S. economy has sprouted an average of 552,000 jobs each month for the last eight and the labor force participation rate was 62.2 percent in April, up from 61.7 at the depth of the COVID War.
Those figures indicate that higher wages have drawn more workers off the sidelines and back to the workplace, which could ease wage growth, The Wall Street Journal said.
As we noted in “Wage Growth Slows as Inflation Speeds Up” (8 Mar 2022), the Ukraine war will accelerate inflation even faster, widening the distance between prices and households’ purchasing power.
The implications are enormous, from prospects for recession, Dragflation, and depression to political, corporate, and supply chain upheaval to individuals’ mental health and family dissolution.
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