The federal government’s Bureau of Labor Statistics (BLS) revealed that price inflation in March decelerated slightly. Still, inflation continues to outpace real wage growth, making life harder for everyday Americans. In conjunction with increasing food prices and nominal wages, this deceleration creates a bleak outlook for working-class citizens struggling to stay afloat.
Although year-over-year price inflation fell slightly from February’s 6.0% to 5.0% in March, it has remained at or above 5% for 23 consecutive months. Despite the Biden administration’s claims of inflation “falling,” their assurances ring hollow for many as inflation continues to erode the value of their wages.
Not only does record-high household debt show that families are struggling as #inflation raises prices and lowers real wages, but this #Fed induced credit expansion will only add to the inflationary pressuring already undermining the #economy.https://t.co/da4F2x8Jek
— Peter Schiff (@PeterSchiff) February 17, 2023
Energy and gasoline prices have experienced downturns, but food prices are still rising. Year-over-year growth for “food at home” fell from 10.2% in February to 8.4% in March. Nominal wages increased by 4.18% year over year, but with inflation at 5%, real wages dropped, resulting in a consecutive 24-month decrease.
Housing costs contribute to the ongoing burden as shelter prices rose 8.2% year-over-year in March, their highest growth rate since June 1982. Month-over-month growth in shelter costs also remained high, offering no reprieve for those struggling to afford the rising costs of basic necessities.
Surveys asking the public if they believe their money is safe if deposited into FDIC insured bank accounts completely miss the point. No one's money is safe anymore, regardless of where it's kept. That's because government created #inflation is destroying the value of the dollar.
— Peter Schiff (@PeterSchiff) April 20, 2023
Federal Reserve officials, including New York Fed President John Williams, are unwilling to claim victory over rising prices. As Williams stated, “Inflation is still too high,” suggesting the Federal Open Market Committee may raise the target interest rate again.
If you gave your child a credit card and they kept maxing it out, you wouldn’t blindly raise their limit—you’d help them change their behavior and figure out where to cut back on their spending.
The approach to our national debt should be no different. pic.twitter.com/RdcUKJ8nyo
— Kevin McCarthy (@SpeakerMcCarthy) April 21, 2023
The effects of inflation can be felt most profoundly when looking at the real cost of food at home. For the two years ending 2022, the consumer price index (CPI) rose by 11%, while food at home increased by 17.6%. Nominal hourly wages grew 15% during this time, but real wages decreased by 4%, bringing more hardship to the fully employed.
A comparison of food prices over two years shows a startling increase. Breakfast food items rose by 42% over two years, lunch items like cheeseburgers increased by 12%, and dinner choices saw a 34% price hike. These increases disproportionately affect low-income and fixed-income individuals, who cannot easily adjust their budgets to accommodate higher food costs.
The Social Security increase for 2021 was only 1.3%, with a modest 5.9% increase in 2022, resulting in a compound increase of 7.2% over two years. Meanwhile, housing costs continue to rise, leaving little room for the most vulnerable to manage higher food expenses. As a result, in 2022, over 53 million people relied on food banks or emergency kitchens to make ends meet.
Inflation remains a thorn in the side of the American people, and the promises of “transitory” inflation seem more like a cruel joke. However, as real wages continue to fall and the costs of basic necessities rise, the future appears increasingly challenging for the everyday worker or retired American family trying to make ends meet in the face of stubborn inflation.