August 11, 2023

A Deeper Dive into the Latest Inflation Report

The Bureau of Labor Statistics yesterday released their July 2023 Consumer Price Index report
The topline consumer price-index (CPI) clocked in at 3.2% year-over-year (and 3.3% when seasonally adjusted). But core CPI—what the Federal Reserve’s prefers over topline CPI because it excludes the volatile food and energy categories—came it at 4.7%. 
Both these inflation measures are well above the Fed’s long-run target rate of 2%. According to the Wall Street Journal, “economists don’t expect the annual rate of inflation to slow much more this year.” 
In other words: Americans are stuck with Bidenflation. 
The Committee to Unleash Prosperity released an important blog today diving into recent inflation trends. Their takeaway: “the ‘must pay’ routine bills,” for things like gas, rent, and groceries, “are rising a lot faster than the bills for more elective expenditures,” like computers and televisions for families. Price increases since President Biden took office are higher for essentials like food and energy than for other goods and services. 
CLICK HERE or scroll below to read the full post. 
Committee to Unleash American Prosperity 
Why Inflation Seems So Much Higher Than Official Numbers
Stephen Moore
Aug. 11, 2023
The new inflation numbers were just released for July and they show 3.2% inflation since last year, and 15% higher prices since Biden came into office. 
But almost no one in the middle class believes these numbers. Why? 
The CPI measures hundreds of different products and takes a composite of the price changes for all of them. 
But the “must pay” routine bills are rising a lot faster than the bills for more elective expenditures. The chart below shows what the biggest price increases have been. Gasoline prices are up 36%, rent is up 32%, eggs, cereal, coffee, used cars are up about 20% and electricity and utilities are up 22%.

(Chart source: Committee to Unleash American Prosperity) 

Meanwhile, cell phones, information technology, televisions, computers, and communications have fallen in price. But in this financially stressed environment, food, gas, eggs, and rent are more important to the average family budget than TVs or computers...

The Bottom Line: As Chairman Arrington said, “Sluggish growth and stubborn inflation continue to persist as a result of Democrats’ spending spree and Biden’s failed economic policies… House Republicans will continue to stop the Democrats reckless spending that created this cost-of-living crisis, which is the first step to reducing inflation and avoiding a recession.” 

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