The Bad News on Inflation Just Keeps Coming

War is peace. Freedom is slavery. Ignorance is strength. Inflation is down. Or at least that’s what Donald Trump says.

I wrote yesterday, following the release of the latest Consumer Price Index, that Trump had snatched inflation defeat from the jaws of victory. Now the Bureau of Labor Statistics has released its other inflation measure, the Producer Price Index, which measures wholesale prices, and it was even worse, running substantially hotter than forecasters expected:

My basic point — that Trump inherited a relatively benign inflation picture and threw that inheritance away with his tariffs and war — is even clearer from the PPI than the CPI. And the PPI is often a leading indicator of future consumer prices, so there’s no relief visible in the near future.

There’s no mystery about what’s going on: it’s mostly about the prices of petroleum products, especially diesel. Diesel prices have risen more than twice as much as gasoline prices over the past year — and the rising price of diesel cascades through the economy, raising business costs and driving inflation across a wide range of products.

But didn’t Trump just make a deal to buy Russian diesel? Yes, and it was shameful. It was also ineffective: Even if Putin can deliver the fuel, which is doubtful — the Ukrainians have resumed their strikes on Russian refineries — the quantity was much too small to make much difference. Indeed, wholesale diesel prices remain significantly higher than they were at the height of the shooting war with Iran, let alone before Trump started that war:

In any case, Trump’s response to the dismal inflation news — even worse for him politically because of the extravagant promises he made in the past — is denial: He keeps insisting that inflation is way down. Is he deliberately lying, or does he truly not know what’s going on? We shouldn’t rule out the latter possibility. Bear in mind that Trump doesn’t read, and he certainly doesn’t read BLS data releases. And while he presumably has aides who do know what the numbers say, are they willing to tell him things he doesn’t want to hear? Probably not.

Then again, I may be making a category error. As far as I can tell, Trump doesn’t believe that there is such a thing as objective truth, there’s only what he wants to be true. Hence my Orwell reference at the top of this piece. Trump doesn’t have the full powers of a totalitarian ruler, but often behaves as if he did (and is enabled in that behavior by almost the entire GOP.) And Orwell wrote about the mutability of history under totalitarian regimes:

If the Leader says of such and such an event, ‘It never happened’ – well, it never happened.

In this case what never happened was surging inflation.

But while Trump is surrounded by lackeys willing to deny reality, according to the latest Fox News poll, 55 percent of voters say that inflation is “not at all” under control — and that includes 30 percent of Republicans.

Inflation won’t be the only issue in the midterms. That same Fox News poll shows voters even more concerned about “corruption in government.” But that is also not exactly a source of Republican strength.

If these numbers don’t generate a blue wave, nothing will.

I have another day of playing academic statesman at Oxford, so that’s it for today.