When you hear ‘8 percent inflation’ bandied about but feel certain your costs are rising at a far higher rate, you’re not crazy.
he Labor Department’s March inflation numbers released this month skyrocketed past February’s, hitting a 12-month increase of 8.5 percent and the steepest annual increase since 1981. That’s no small figure, but most Americans know the inflation they encounter at the grocery store checkout, the gas pump, the car lot, and the leasing office is far higher than that.
Just look at basic items like groceries and gas, and you’ll see how much higher those necessities are climbing than the generic inflation figures slapped across headlines.
According to the Bureau of Labor Statistics (BLS), in the average U.S. city, ground beef is up 14.9 percent since last March, boneless stew beef is up 24.3 percent, bacon is up 23.1 percent, boneless chicken breasts are up 17.6 percent, eggs are up 25.9 percent, milk is up 17 percent, frozen orange juice concentrate is up 18 percent, and ground coffee is up 15.8 percent. Meanwhile, fuel oil has jumped a whopping 71.5 percent, and utility gas is up 23.3 percent.
Many of these urban numbers don’t even capture how steeply prices have risen for middle America, however. In the Midwest, ground beef has risen 24.5 percent, almost 10 percentage points more than the urban average.
While BLS breaks down beef products into ground beef, steaks, stew beef, etc., its “all other uncooked beef” category shows a drastic 38.2 percent jump in the Midwest, compared to a still-high rise of 25.4 percent in cities. The inflation of the price of bacon in the Midwest is 3 percentage points higher than in cities, while for boneless ham it’s more than 15 percentage points higher. The price of boneless chicken breasts in the Midwest jumped by 31.2 percent, compared to 17.6 in U.S. cities.
In all likelihood, these prices aren’t done climbing. Investment firm Evercore ISI projected the price of chicken breasts to jump at a year-over-year rate of up to 70 percent in the first half of 2022, with beef and pork prices rising 20 percent.
So when you hear “8 percent inflation” bandied about but feel certain your costs are rising at a far higher rate, you’re not crazy — you’re just feeling the very real consequences of inflationary policies that Washington types are happy to brush off.
Don’t listen to CNN journo-splaining to you “Why inflation can actually be good for everyday Americans and bad for rich people.” As Axios reported from Labor Department statistics, “Shoppers with incomes of less than $40,000 aren’t buying as much fresh meat and seafood. … They’re turning to frozen meat or canned stuff instead — and buying more store brands. It’s these lower-income shoppers who are most at-risk as food prices rise.”
It’s also not just gas and groceries that are rising higher and faster than the nationally reported inflation numbers. According to a Redfin analysis, February saw a 15 percent year-over-year increase in asking rent, and a 31 percent jump in the national homebuyers’ median monthly mortgage rate. Americans in the market to buy used vehicles have also seen a far higher price spike than the overall inflation rate in the past year, at a whopping 41.2 percent as reported in March.
At the same time, wages can’t keep pace with rising expenses, meaning “Bidenflation” is skimming off the top of Americans’ paychecks — to the tune of around $4,200 in annual depreciation of the average salary’s worth.
These are unsustainable numbers for most Americans, especially those who aren’t making as much as the politicians pushing bloated, multi-trillion-dollar spending plans to flood the economy with cash that’s bleeding value. Legacy media outlets might try to downplay rising inflation as something that could be solved by eating lentils and letting the family pet die, but Americans know every time they buy groceries, fill the gas tank, or pay the utility bill how hard high-spending inflationary policies are making their lives.
Elle Reynolds is an assistant editor at The Federalist, and received her B.A. in government from Patrick Henry College with a minor in journalism. You can follow her work on Twitter at @_etreynolds.
Why We Have Record Inflation And It’s Probably Not Going Away Fast
Economists’ track record at diagnosing and resolving ‘inflation’ problems over the past 70 years or so has been very bad.
My cmnt: To read this entire commentary please click Federalist above.
My cmnt: This man’s answer to inflation is to tie the dollar back to gold. He also notes the obvious, that is printing and dumping trillions of dollars into a stagnant economy (per Biden and the democrats) will always create inflation.
My cmnt: But tying the dollar to gold is not going to keep inflation in check. The real cause of inflation is electing democrats to Congress and the presidency. Democrats are Marxists and Marxism (i.e., central control of the economy and everything else) is always going to fail.
My cmnt: President Trump is a business man and he understands prosperity. The key to prosperity is to limit regulations to what is absolutely necessary not what a wet diaper, commie liberal-college nature worshiper thinks is necessary. The other key is controlling corruption – don’t elect democrats. The last key is create a constant flow of inexpensive energy thru oil, natural gas, coal and nuclear energy plants.
My cmnt: Under President Trump we had the best economy since the 60s. Under faux-president O’Biden we have the worst economy since Carter in the late 70s. The cause and effect paradigm is so simple and easy. Democrat pipe dreams (i.e., communism and strict top-down control of production and information) always ruin the economy. Forcing Americans to buy electric vehicles and replacing reliable power sources with faerie dust and sunlight will doom us to medieval standards of living – that is where the elites live off the labor of the commoners and have all the few nice things available and the common man lives in squaller as they do today in third world and communist countries.
The U.S. consumer price index (CPI) in March was 8.5 percent higher than a year earlier, the highest “inflation” figure since the early 1980s. For a typical family, it now takes an additional $5,000 to buy the same stuff from a couple of years ago. Higher prices account for $3,500 of this, and $1,500 from higher taxes paid on income.
What’s going on here? Is it a problem? What is the solution?
Unfortunately, economists’ track record at diagnosing and resolving “inflation” problems over the past 70 years or so has been very bad.
I put the word “inflation” in quotes because the term does not have an exact meaning. It arises from popular speech and has something to do with higher prices. From here, we should break down the possible factors into monetary factors, and nonmonetary factors. Both are at work today.
What’s Causing Today’s Inflation
“Non-monetary” factors are all the supply-demand-type issues that we can clearly see today. Much of the rise in the CPI comes from used car prices, which have soared due to shortages of new cars on dealers’ lots. A variety of similar supply-chain issues have left store shelves bare of a wide range of items. Government restrictions on housing development have created housing shortages in popular cities.
“Monetary” factors are basically due to central bank policy. Since 1971, when the United States and the rest of the world left the Bretton Woods gold standard system, we have lived in an environment of floating fiat currencies.
In the short term, the value of these currencies goes up and down somewhat unpredictably. In the longer term, there is a clear trend: The value of currencies goes down. A lot.
Today, the value of the dollar is, by my estimate, about one-fiftieth of what it was in the 1960s. Basically, we have a two-cent dollar.
In 2020, in response to the Covid virus, governments around the world spent spectacular amounts of money. The U.S. federal government ran a deficit of 15 percent of GDP, the highest in peacetime. This was largely financed by central banks.
The Federal Reserve increased the monetary base by about $2.5 trillion, from $3.5 trillion in 2019 to $6.0 trillion in 2021. Not surprisingly, this dramatic increase in the amount of dollars in existence led to another decline in the dollar’s value.
The combination of both these nonmonetary supply-demand issues, and the monetary effects, is today producing the highest CPI readings in decades.