Bidenomics! Americans are 2.5% poorer than they were 12 months ago.

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The inflation numbers are out, and they’re ugly!

We have previously noted the January, 7.5%, and February, 7.9%, year-over-year inflation rates, and the March figure was released this morning.

8.5%.

From The Wall Street Journal:

    U.S. Inflation Hit Four-Decade High in March

    Consumer-price index rose 8.5% from year earlier, driven by skyrocketing energy and food costs

    by Gwynn Guilford | Tuesday, April 12, 2022 | 8:45 AM EDT

    U.S. inflation rose to a new four-decade peak of 8.5% in March from the same month a year ago, driven by skyrocketing energy and food costs, supply constraints and strong consumer demand.

    The Labor Department on Tuesday said the consumer-price index—which measures what consumers pay for goods and services—in March rose at its fastest annual pace since December 1981, when it was on a recession-induced downswing after the Federal Reserve aggressively tightened monetary policy. That marks the sixth straight month for inflation above 6% and put it above February’s 7.9% annual rate–well above the Federal Reserve’s target.

    The so-called core price index, which excludes the often-volatile categories of food and energy, increased 6.5% in March from a year earlier—up from February’s 6.4% rise, and sharpest 12-month rise since August 1982.

    On a monthly basis, the CPI accelerated at a seasonally adjusted 1.2% last month, from 0.8% in February, and the fastest one-month increase since 2005.

I understand that government bureaucrats don’t like dealing with “often-volatile” data, but I have yet to understand why “the often-volatile categories of food and energy” are excluded from the core CPI; it’s not as though consumers don’t have to pay for food and energy, every single month.

How often do you buy a refrigerator or a washing machine? How often do you buy even small appliances like toasters or kitchen blenders? Not often, I’d guess, but we’ve been to Kroger a few times already this month.

After several paragraphs telling us why prices are increasing so fast, we get to this:

    “There’s an element of sticker shock when people go to fill up their tank or go to the grocery store. Lower- and middle-income households are already having to make choices about what to buy because they’re having to pay so much more for food and energy,” (Richard F. Moody, chief economist at Regions Financial Corp) said.

Which led to this:

    Solid demand for labor has shifted bargaining power toward workers, putting upward pressure on wages, which could feed into broader price gains. Annual wage growth was 6% in March, the fastest pace since records began in 1997, according to the Federal Reserve Bank of Atlanta’s wage tracker.

    Still, wages for most are growing too slowly to offset inflation. This could push workers to demand higher wages, creating a feedback loop that puts upward pressure on inflation.

When inflation is at 8.5%, while annual wage growth was 6.0%, consumers have become automatically poorer in real terms, 2.5% poorer. But hey, this is for what 81,268,924 Americans voted!

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