An economist says “families’ incomes are not keeping up with inflation” after the latest consumer price index showed inflation rose 0.4% in April, up 4.9% compared with April 2022, the U.S. Bureau of Labor Statistics reported Wednesday.
“Wednesday’s data show inflation is still firmly entrenched in the economy, and that will continue until we rein in government’s spending, borrowing, and printing of money,” EJ Antoni, a research fellow in regional economics in the Center for Data Analysis at The Heritage Foundation, told The Daily Signal in a written statement. (The Daily Signal is the news outlet of The Heritage Foundation.)
“While the headline inflation number continues to trend down from its 40-year high last year, core inflation remains stubbornly high and overall inflation is still well above the Fed’s 2% target,” Antoni said. “For context, the monthly inflation rate in April is high enough that prices [will be] doubling in just 16 years at that rate.”
And most importantly, families’ incomes are not keeping up with inflation. Although earnings are way up since January 2021, prices have risen substantially faster, which means the average family can buy much less today than two years ago.
Higher interest rates on everything from credit cards to mortgages are further increasing costs for families. Between these higher financing costs and declining real earnings, the average family has effectively lost $7,100 in annual income under [President Joe] Biden.
The shelter index, which pertains to prices associated with housing, rose 0.4%, the energy index rose 0.6%, the gasoline (all types) index rose 3%, the used cars and trucks index rose 4.4%, and the medical care commodities index rose 0.5%, according to the U.S. Bureau of Labor Statistics.
The food at home index fell 0.2%, the fuel oil index fell 4.5%, the energy services index fell 1.7%, the utility (piped) gas service index fell 4.9%, the new vehicles index fell 0.2%, and the transportation services index fell 0.2%, the U.S. Bureau of Labor Statistics also reported.
“Runaway prices continue to outpace wages, making Americans and small businesses poorer,” Alfredo Ortiz, president and chief executive officer of the nonpartisan Job Creators Network, said in a prepared statement. “Core CPI growth exceeded estimates over the last year. For 25 consecutive months, real wages have declined as historic and persistent inflation continues.”
“Over the course of Biden’s presidency, inflation has increased by more than 15%, making Americans on fixed incomes one-sixth poorer than when Biden took office,” Ortiz said. “This Bidenflation is a direct result of the Biden Administration and Congressional Democrats’ reckless spending that has diluted the currency already in existence and bid up prices.”
The White House referred The Daily Signal to Press Secretary Karine Jean-Pierre’s statement about the April inflation report.
“With today’s report, annual inflation has come down 45 percent since last summer. The annual inflation rate has now come down 10 months in a row at a time when our economy and job market are strong, with the unemployment rate at its lowest level in more than 50 years,” Jean-Pierre said. “Gas prices are down nearly $1.50 from their summer peak, and prices at the grocery store have actually come down the last two months, providing some welcome breathing room for families.”
“While we have more work to do to lower costs for families, the President’s Inflation Reduction Act is already working to lower the cost of prescription drugs, health care, and home energy costs,” Jean-Pierre added. “And with more than $400 billion in private sector manufacturing investments committed already, his Investing in America agenda is creating good jobs you can raise a family on in communities throughout the country.”
The March consumer price index rose 0.1%, up 5% from March 2022, The Daily Signal previously reported.
The March report showed that the shelter index rose 0.6%, the transportation services index rose 1.4%, the new vehicles index rose 0.4%, the medical care commodities index rose 0.6%, and the food-away-from-home index rose 0.6%, the Bureau of Labor Statistics reported last month.
At the same time, the gasoline index decreased 4.6%, the fuel oil index decreased 4%, the utility (piped) gas service index decreased 7.1%, the energy index decreased 3.5%, and the used car and trucks index decreased 0.9%.
The next consumer price index will be released June 13.
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