Despite White House spin, inflation is still roaring as Department of Labor data shows the rate for April at a higher-than-expected 8.3% over the same month last year.
The consumer price index shot past the estimated 8.1% level economists forecast. Core inflation, which excludes the volatile energy and food sectors, doubled from its March rate to 0.6%, well past analyst expectations. This suggests underlying pressures remain strong.
April’s CPI is the second highest rate in over four decades, trailing only March’s 8.5% that set the high bar. Ominously for lower income Americans is the cost of groceries, which soared 10.8% for the fastest increase since 1980.
Americans are feeling the pinch in nearly every purchase or payment. Housing costs, both rental and purchase, are hotter than they’ve been in three decades. Air fares shot up 18.6% in just a month and are now 33% higher than just a year ago.
The harsh reality is that workers, even with wages increasing, have less to spend when accounting for inflation. Average hourly earnings fell 0.1% from March to April and, with seasonal adjustments, dropped 2.6% from April 2021 to April 2022.
Multiple national polls show the impact on average Americans. A Harris poll reveals 84% of U.S. residents cutting back on purchases. Moody’s Analytics and Penn-Wharton estimate each U.S. household is spending $300 more for the same goods and services.
Signs last fall that inflation had peaked were short-lived, as many in the administration and Federal Reserve alleged. This temporary dip in August and September was not proof that soaring prices were “transitory” as was being claimed. Prices shot right back up in October and stayed the course.
President Joe Biden quickly pounced on the April number, saying getting inflation under control is his “top domestic priority.” He continues to blame everything from supply chain restrictions and the waning COVID-19 pandemic to the Russian invasion of Ukraine for skyrocketing prices.
Perhaps the White House will wake up and realize that trillions poured into pet projects and social engineering are ruining the economy. Red-hot inflation was here long before Putin’s forces crossed into Ukraine, and critically, so was runaway spending.