On the surface, inflation appears to be moderating, with November’s Consumer Price Index (CPI) numbers dropping slightly on Tuesday. However, underneath those numbers lie cold, hard facts that illustrate the challenging financial conditions facing American families.
While the main CPI year-over-year number is 7.1% overall (down from 7.7% in October), it’s important to note that prices have gone up 13.8% since the beginning of the Biden administration. This is nearly twice the price increase under the entire four years of the Trump administration (7.6%). Said differently, prices have gone up about as much in the last year as they did over the entire four years of the previous administration.
The mainstream media and Biden administration are spinning this as a massive win for their progressive agenda. Yet hard-working Americans still face high prices for everyday items. Gas prices are over 10% higher than they were a year ago, and groceries remain 12% higher than last November. Food under Biden is up 16.8%, energy is up 41.1%, and shelter is up 11%.
Meanwhile, hourly earnings for American workers are up only 9.7%. This means that an hour of working buys almost four percent less for families than when President Biden took office in January of 2021.
This pay cut and other inflation effects are significant drivers for why the personal savings rate is plummeting. In February 2020, before the COVID-19 pandemic hit, the percentage of disposable income that Americans saved was about 9.3%. In October, that number was 2.3%, the second lowest reading on record, going back to 1959. Americans are raiding their piggy banks to scrape by in the face of falling real wages.
American credit card debt has also skyrocketed 15% from a year ago, the largest annual jump in over 20 years. As if that was not enough, Americans have made record-breaking “hardship withdrawals” out of their 401(k) retirement plans to cover their basic needs.
The inflationary pace has slowed over the last few months, despite the Biden administration, not because of it. The most significant step taken to fight inflation has been by the Federal Reserve, which has belatedly increased interest rates to cool off the American economy, a backlash to counteract the Biden administration’s tax, spending and regulatory policies.
However, it does not appear that the Biden administration and the liberals who control Congress have learned their lesson. They are currently developing a last-minute gambit to ram through a massive spending package before their party loses control of the House. It is a cynical attempt to counteract the voice of the American people, who recently chose a new House majority and demanded policies that will lower inflation, address high energy prices and ensure the greatest economy in the world works for all Americans.
In the new Congress, our leaders must realize that millions of Americans are still struggling to get by and that the only way for them to be rescued is through the policies of an America First Agenda that prioritizes their interests. The future of our economy and our nation depends on it.
Linda McMahon is the Chair of the Board and Chair of the Center for the American Worker at the America First Policy Institute. She previously served as the Administrator of the Small Business Administration.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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