Today’s inflation report was more painful than analysts predicted, with the Bureau of Labor Statistics announcing that inflation on all items increased 8.3% for the 12 months ending in August.
While this was a slight easing from near record-highs recorded earlier in 2022, the energy index rose 23.8% over the last year, and the food index increased 11.4% — the largest 12-month increase since 1979. Real wages fell 3.4%, meaning Americans are suffering a pay cut even if their wages are nominally going up — any pay raise is gobbled by inflation.
This painful 8.3% inflation increase was higher than expected by economic experts, and the market responded by immediately dropping more than 500 points after the report’s announcement.
Because it is also much higher than the Federal Reserve’s 2% inflation target, this suggests the market knows the Fed will continue to hike interest rates, which will likely make home ownership more expensive and unemployment higher.
Inflation is still painfully high and some slight relief at the gas pump has been swallowed up by the spike in grocery prices. Combine inflation with a record drop in U.S. household wealth, and it’s clear that Americans are worse off than when President Joe Biden took office.
Americans’ wealth fell $6.1 trillion in the second quarter to its lowest in a year, according to a Federal Reserve report.
“Household net worth tumbled to $143.8 trillion at the end of June from $149.9 trillion at the end of March, its second consecutive quarterly decline, the Fed’s quarterly snapshot of the national balance sheet showed. Through June, Americans’ collective wealth had fallen by more than $6.2 trillion from a record $150 trillion at the end of 2021,” Reuters reported.
Andrew Puzder, former chief executive of the company that franchises the fast-food outlets Hardee’s and Carl’s Jr., a member of Job Creators Network and former Labor Secretary nominee of former President Donald Trump, told Daily Caller News Foundation the inflation is driven by Democrats’ stimulus spending and ongoing COVID-related payments.
Puzder said he wasn’t surprised by the drop in household wealth, “A lot of that has to do with the market decline and with inflation causing people’s savings to dissipate more quickly, all of which is a result of the $1.9 trillion spending spree that the Biden administration went on in March of 2021.”
Speaking to the Daily Caller News Foundation during the National Conservatism 3.0 conference in Miami, Puzder pointed out that Larry Summers, along with Jason Furman and Steve Ratner — all former Obama administration economic advisers, opposed the Biden stimulus package.
“They all said ‘Don’t do this. This is going to pour kerosene on the fire of inflation,’” Puzder said. “They did it anyway. They denied it would happen, they denied it was happening when it was happening. Then they denied it would last. And now they’re denying that it was their fault.”
Puzder, 72, said Biden’s was the worst economic administration “in my lifetime.”
Biden and the Democrats are recession deniers. It’s time for voters who want better for their families to jolt them back into reality in November.
Carrie Sheffield is a senior policy analyst at Independent Women’s Voice.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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