Grim economic news for New Hampshire residents as inflation continues to climb, spiking to a 40-year high at 7.9 percent. And, experts say, it’s likely to get worse in the coming months — presenting a serious problem for vulnerable incumbents like Democrats Sen. Maggie Hassan and Rep. Chris Pappas.
The U.S. Labor Department released numbers Thursday showing the previous 12 months had the highest rate of inflation since 1982 as Americans deal with sky-high prices for food, gas, and basic goods.
President Biden blamed Russian President Putin.
“[T]oday’s inflation report is a reminder that Americans’ budgets are being stretched by price increases and families are starting to feel the impacts of Putin’s price hike,” Biden said in a statement
“The numbers are eye-watering, and there is more to come,” Eric Winograd, senior economist at asset management firm AllianceBernstein, told the Associated Press. “The peak in inflation will be much higher than previously thought and will arrive later than previously expected.”
In New Hampshire, gas is already more than $4 a gallon and heating oil is topping $5 a gallon. With the worst inflation still ahead, the response from members of the New Hampshire congressional enate delegation has been to continue with the status quo.
Polls show people across the nation and here in New Hampshire say their top issue is inflation. And yet as of late Thursday night, neither Hassan nor Pappas had released a statement about the new inflation numbers or any plans to address the problem. Nor did they respond to requests for comment.
[Editor’s note: Despite being taxpayer-funded public employees, the staffers at Hassan and Pappas’ offices have been instructed not to respond to media requests from NHJournal.]
Hassan did, however, post a message praising Major League Baseball for resolving a labor dispute:
In the past, both have argued that increased federal spending, like the Build Back Better proposal Pappas voted for late last year, is the best way to solve the inflation problem.
Hassan has proposed a temporary gas tax holiday as a way to deal with rising prices. That would add about $20 billion in federal debt as funds were transferred from the general fund to the highway fund.
“It would be about a $20 billion hit on the Transportation Trust Fund,” Robert Puentes, president of the Eno Center for Transportation, told Marketplace. “That’s the main source of money for fixing roads, bridges. and subways, and a gas tax holiday for the rest of the year would cut it in half, Puentes said.
And, economists note, the “spend to solve” strategy could actually make the inflation problem slightly worse.
Southern New Hampshire University’s Professor of Economics Dr. Nicole Bissessar said that while long-term federal spending does not generally increase inflation, spending with short-term benefits like relief checks and gas subsidies can alter the market and lead to higher consumer prices.
“If government spending leads to an increase in consumer demand which then will affect supply immediately (short term 1-3 months), it will affect prices,” she said.
Associate Dean of Business Dr. Zuzana Buzzell said the federal government can take action to curb the rise in inflation by going after monetary policy.
“The government and Federal Reserve should act quickly to address the rise. There needs to be a tightening on monetary policies, starting with the rise in interest rates and tapering the asset purchases. The monetary policy needs to put more weight on inflation risks in 2022. This is particularly important as commodity prices are expected to rise again in 2022,” Buzzell said.
The Federal Reserve is expected to raise interest rates later this month in an effort to slow the inflation surge.
GOP candidates running to unseat Hassan lost little time Thursday in jumping on the inflation numbers. New Hampshire Senate President Chuck Morse (R-Salem) said inflation has been climbing since President Joe Biden took office, and Hassan has failed to act.
“Inflation is out of control and prices on everything from gas to milk to everyday purchases are skyrocketing. We need to get spending under control in DC the same way we’ve controlled it in NH. The 603 Way, not the DC Way, will get us out of this inflationary crisis,” Morse said.
Former Londonderry Town Manager Kevin Smith knocked Hassan for blaming oil company price gouging for the spike in energy prices, calling that a “conspiracy theory.”
“Granite Staters are desperate for solutions, yet Maggie Hassan instead chooses to peddle short-term gimmicks that won’t work and debunked ‘price gouging’ conspiracy theories that aren’t true,” he said.
Don Bolduc accused Hassan of being out of touch with Granite Staters who are struggling to pay their bills.
“Everyone is feeling the squeeze of inflation. Unfortunately, Sen. Maggie Hassan has been part of the political machine for so long, she’s stopped understanding the real-world problems facing Granite Staters,” he said.
According to the Associated Press, from January to February, prices for nearly every category of goods and services went up substantially. Grocery costs jumped 1.4 percent, the sharpest one-month increase since 1990, other than during a pandemic-induced price surge two years ago. The collective price of fruits and vegetables rose 2.3 percent, the largest monthly increase since 2010. Gas prices spiked 6.6 percent, and clothing, 0.7 percent.
For the 12 months ending in February, grocery prices jumped 8.6 percent, the biggest year-over-year increase since 1981, the AP reports. Gas prices are up 38 percent and housing costs have risen 4.7 percent, the largest yearly jump since 1991, according to the AP.