Grocery bills are rising along with prices at the gas pump and every American is feeling it.
According to new data released today, inflation rose 5.4% last month compared to one year prior hitting a 13-year high. From August to September, inflation also rose by 0.4%, faster than the month prior.
Excluding gas prices, which are highly volatile, from the overall numbers, inflation rose 4% since last year.
Although energy prices continued to spike, food and shelter prices are responsible for at least half of the increase in prices for all goods.
Americans don’t need to see the numbers to know that the cost of living is rising and that their paychecks just are not going as far as they did one year ago.
By the numbers
We pulled data on price increases for common household goods and expenses for our monthly inflation tracker. Take a look at how much more you are paying for staples than this time last year.
You can compare last month’s inflation numbers to the previous month here: IWF Inflation Tracker.
What’s driving inflation?
Multiple factors are driving inflation:
- Worker shortages in production, manufacturing, and transportation that are making it difficult to produce, ship, and transport goods to store shelves. With fewer workers, employers are increasing pay and passing along the increased labor costs to customers in the form of higher prices. Workers have been discouraged by federal benefits to stay out of the workforce.
- Increased demand and consumer spending in the spring and summer for goods and services as businesses reopened, people vacationed, and households flush with federal stimulus dollars looked for ways to spend it.
- Skyrocketing energy prices due to supply-chain disruptions and increased global demand.
Directly and indirectly, federal policies that discouraged work, flooded households with cash benefits even if they didn’t need it, and reduced our energy independence are behind the factors driving prices higher.
Fewer and fewer goods are leading to shortages that are expected to only get worse until worker and supply-chain issues are resolved.
Many economists are warning Americans to start shopping for Christmas presents now, or else they may not arrive in time. Home heating bills are also expected to rise as my colleague, Kelsey Bolar, so aptly wrote about today.
Consumers don’t expect prices to fall any time soon. According to a survey by the New York Federal Reserve Bank, their inflation expectation for three years from now rose to 4.2% in September, even higher than the previous month.
Liberals in Congress are pushing to pass President Biden’s $3.5 trillion budget bill before the end of the year. Injecting billions of dollars into the economy will turbocharge inflation and ensure that grocery bills only get bigger for fewer items. This bill is the wrong plan at the wrong time.