Townhall.com Editor Katie Pavlich and former Tennessee Representative Harold Ford Jr. discuss key voter issues ahead of the midterm elections.
The tightest labor market in decades is spurring rapid wage gains for millions of Americans, but painfully high inflation is rapidly eroding those gains.
The Labor Department reported last week that the average hourly wage for all employees fell 3% in September compared to the same month last year, given the impact of rising consumer prices. Taking into account the spike in inflation, his average hourly earnings fell by 0.1% last month on a monthly basis.
By that measure, the typical American worker is actually worse off today than he was a year ago, even though nominal wages are rising at the fastest pace in years. increase.
Because that’s what consumers are facing. scorching inflationtheir purchasing power declined rapidly.
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The government said Thursday that the consumer price index, which measures a wide range of prices for daily necessities such as gasoline, food and rent, rose 0.4% in September from the previous month. Prices on an annual basis he rose 8.2%.
These figures beat both the headline figure of 8.1% and Refinitiv’s economists’ forecast of 0.2% monthly growth. federal reserve That’s because they’re trying to curb price rises with an aggressive rate hike campaign that will keep consumer demand down.
In a further worrying development that suggests underlying inflationary pressure The economy remains strong, with core prices, which strip out the more volatile measures of food and energy, rising 0.6% from the previous month in September. From the same time last year, core prices rose his 6.6%, the fastest since 1982.
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Inflation has put severe financial pressure on most U.S. households, forcing them to pay for daily necessities such as food and rent.
That burden is disproportionately borne by low-income Americans whose already stretched salaries are greatly affected by price fluctuations.
Households saw some relief last month in the form of: gas price cutfell 4.9% in September from the previous month, while other price gains were found to be persistent and stubbornly high.
Grocery costs rose 0.7%, a 13% increase over the 12-month period. Consumers paid more for products such as cereals, poultry, milk and fresh vegetables.
Shoppers view organic produce at a supermarket in Montebello, California on August 23, 2022. (Photo by Frederic J. Brown/AFP) (((Photo by FREDERIC J. BROWN/AFP via Getty Images) / Getty Images)
Shelter costs, which account for about 40% of the increase in core inflation, rose 6.6% over the past year, their highest since February 1991.
Rents rose 0.8% month-on-month and 6.7% year-on-year. Rising rents are a cause for concern, as rising housing costs have the most direct and severe impact on household budgets. Another data point, which measures how much a homeowner would pay for comparable rent if he didn’t buy a home, was up 0.8% in September from the previous month.
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“The mix of inflation measures is probably more worrisome than the overall numbers,” said Seema Shah, chief global strategist at Principal Asset Management. The rise in the medical index confirms that price pressures are very tenacious and will not come down without a fight from the Fed.”
