President Biden’s reckless spending has caused prices faced by working families and small businesses to surge by 3.5 percent—a year over year spike in a key inflation indicator not seen in three decades.
Here are key takeaways:
Inflation is Accelerating. According to the Department of Commerce, core inflation grew faster in June at 3.5 percent than it did in May (3.4 percent).
- These prices have risen every month since President Biden took office, which is why Americans are calling it Bidenflation.
- This is the fourth big upturn in a row for the PCE price index and kept the increase over the past 12 months at 4 percent.
- The PCE price index is at its highest level since 2008.
- The cost of back-to-school shopping has skyrocketed because of inflation.
- Families with children in elementary through high school plan to spend an average of $848.90 on school items, which is $59 more than last year.
This Inflation Can’t Come at a Worse Time for Working Families
- Real disposable personal income decreased more than 30 percent, according to the Bureau of Economic Analysis’s 2nd Quarter GDP report.
- Americans are making less today than they did a year ago because of inflation.
This Inflation Is Harming Main Street Businesses
- Businesses will have to raise prices in order to offset the costs of competing with President Biden’s unemployment bonus that pays people more to stay at home than go to work.
- Federal Reserve Chairman Jerome Powell himself noted that the unemployment bonus is keeping Americans from returning to work.
Less Income and Lower Savings Means Less Economic Growth
- The personal saving rate dropped to 10.9 percent, close to pre-pandemic levels.
- With less excess savings (and lower income), consumers are less likely to spend—and with 70 percent of GDP being consumer spending, that means slower growth ahead.
Inventories Are Getting Depleted, Meaning Higher Prices Will Come Later
- Working American families are likely to see even higher prices as pent up demand depleted many goods from the inventories of businesses–without more supply, higher prices are likely to follow.
Treasury Secretary Janet Yellen said this inflation is likely to continue for several more months. This is a big reason why President Biden got an “F” on his economic report card for his first six months in office.