Inflation Isn’t a Bug in the System, It’s a Feature – By J. Kennerly Davis (Real Clear Policy) / May 17, 2024
May brings more bad economic news for hard-pressed American households. “Transitory” inflation remains firmly entrenched at rates equal to or higher than those reported at the start of 2024.
The Labor Department reports this week that the Consumer Price Index, or CPI, it’s official measure of the rate of change in the retail price of a basket of everyday goods and services, rose 0.3% in the month of April, the same as for the month of January. For twelve months, CPI increased 3.4% through April compared to 3.1% for twelve months through January. And wholesale prices, a good indicator of future retail prices, increased much more than expected in April, rising at the fastest annual rate since April 2023.
The cumulative effect of persistent inflation is devastating. Since President Biden took office in 2021 the CPI is up, and Americans’ purchasing power is down, by 19%. For basic necessities, the situation is even worse. Groceries are up 21%. Gasoline prices are up 47%. The cost of shelter 20%, and electricity almost 30%.
American workers cannot keep up. Since President Biden took office, average hourly earnings after inflation have fallen over 2.5%. A typical American family must pay $12,000 more per year simply to maintain the standard of living that it enjoyed when President Biden took office.
