Consumer prices overall rose 3.7% from a year earlier, up from 3.2% in July, according to the Labor Department’s consumer price index. That’s the second straight bump after 12 consecutive declines in annual inflation.
On a monthly basis, prices increased 0.6%. That followed a 0.2% rise in July and marked the biggest jump in more than a year.
Fox Business reported the monthly core inflation measure climbed faster than expected, with core prices more than two times higher than the typical pre-pandemic level.
"Today’s report was a disappointment – not because headline inflation jumped, much of which can be explained by an increase in gas prices, but because core inflation moved higher by 0.3%, which was higher than expected," said Chris Zaccarelli, the chief investment officer for Independent Advisor Alliance.
Scorching-hot inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily affected by price fluctuations.
The inflation increase hit millions of workers' paychecks last month. Average hourly earnings for all employees declined 0.5% in August from the previous month when factoring in the impact of rising consumer prices, reported Megan Henney for Fox Business.
All of this is probably news to alleged President Joe Biden, who recently used his creepy whisper to claim of Bidenomics: “It’s working.”
As our friend Stephen Moore observed in the Wednesday, September 13, 2023 issue of his must read Committee to Unleash Prosperity Hotline – it’s free and you can subscribe through this link.
According to Steve’s research, if Bidenomics is working for some, it is certainly not poor people. The poverty measure soared in the new report for every measurable group. Old people. Blacks. Hispanics. Whites. Children. Single mothers. The child poverty rate more than doubled.
And it is not just poor people who are feeling the pressure imposed by Biden’s failed economic policies.
A recent PNC Bank survey found that the majority of employees are stressed about their finances. Across industries and demographics, seven in 10 employees say they experience stress related to their personal finances, and, although they report feeling secure in their jobs, 63% of respondents are living paycheck to paycheck. Inflation is also a key factor contributing to employee stress, with 90% of those surveyed saying that they are negatively affected by inflation, and that their ability to set aside money for savings and cover basic necessities has been significantly impacted.
And these concerns are starting to affect consumer confidence.
Al Lewis reported the Conference Board's Consumer Confidence Index fell to 106.1, from a revised 114 in July. That's well below the 116 consensus estimate from Dow Jones.
“Consumer confidence fell in August 2023, erasing back-to-back increases in June and July,” said Dana Peterson, chief economist at The Conference Board. "Consumers were once again preoccupied with rising prices in general, and for groceries and gasoline in particular."
The consumer confidence index is a leading indicator used to predict consumer spending, which drives more than two-thirds of U.S. economic activity. It details consumer attitudes, buying intentions, vacation plans, and consumer expectations for inflation, stock prices, and interest rates.
The board's expectations index, which measures consumers’ six-month outlook for income, business and labor conditions, declined to 80.2, down substantially from 88.3 in July.
The expectations index is just a tick above 80, the level that often signals the U.S. economy is headed for a recession in the coming year.
"Consumers may be hearing more bad news about corporate earnings, while job openings are narrowing, and interest rates continue to rise — making big-ticket items more expensive," Peterson said.
Consumers are also feeling less secure about their current situations. The board’s Present Situation Index, which is based on consumers’ assessment of current business and labor market condition, fell to 144.8 from 155.3 last month.
Last week, the University of Michigan's report on consumer sentiment showed a decline in optimism with consumers concerned about persistent inflation.
Workers should be concerned about Biden inflation for a lot of reasons, not the least of which is that the Biden Federal Reserve’s preferred tool for curing inflation is raising interest rates – and thereby raising unemployment, instead of cutting the real cause of inflation, Biden’s out-of-control spending.
The Capitol Switchboard is (202-224-3121), call today and tell your Representative and Senators that it is time to tame inflation by cutting spending through the coming end of year appropriations negotiations.
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