Today, the Bureau of Labor Statistics released data on inflation for the month of November and the news is troubling. The price of goods has risen 0.8 percent from October to November and 6.8 percent from November 2020 to the same time in 2021.
As price increases on items including gas, groceries, apparel, and travel continue to erode household budgets, Americans are left to wonder when relief will come.
By the numbers
The consumer price index measures the change in prices paid by consumers for goods and services. Here are some startling figures from today’s report for November:
- The 6.8 percent overall inflation rate is the largest 12-month increase since 1982.
- Inflation on all items less food and energy rose 4.9 percent over the last 12 months.
- Energy prices rose 33.3 percent over the last year.
- Food prices increased 6.1 percent.
We dig deeper. According to our monthly inflation tracker prices continue to rise across various grocery basket items and household expenses.
White House response: What inflation?
The White House is downplaying inflation and playing up the strength of the recovery under President Biden.
After the inflation data was released, White House economic advisor Ron Klain tweet about gas prices:
He must have missed that fuel for our cars was up 58 percent from November of 2020.
Meanwhile, the administration has a new line of attack against the media. White House officials claim the media is responsible for pushing a narrative that Americans are hurting financially.
In other words, deflect by blaming the news for reporting the facts. Does the White House not recognize that news outlets are not their own state-run communications shop? Inflation cannot be ignored and legacy media outlets are right to focus on it.
Meanwhile sympathetic left-leaning economists are gaslighting, calling the stories from real Americans false or overblown:
“I understand why the White House is frustrated. We’ve had the media consistently emphasizing the bad things, while downplaying or outright ignoring what are really positive things in the economy,” said Dean Baker, a liberal economist. “The media has been finding people who claim to be experiencing real hardship in the economy and telling stories that are either not true — or, if they are true, are incredibly idiosyncratic.”
The pain Americans feel is in their wallets not their imaginations
In poll after poll, Americans express their frustration with rising prices and their pessimism over the economy:
- Washington Post-ABC: Roughly 70 percent of Americans rate the economy negatively, with nearly half of Americans and political independents blame Biden for inflation
- Wall Street Journal: Some 56 percent said inflation was causing them major or minor financial strain, including 28 percent who said they felt major pressures.
- Gallup: 45 percent of Americans report financial hardship triggered by increased prices and 10 percent describe the hardship as threatening their current standard of living
- Associated Press-NORC Center for Public Affairs Research: Two-thirds of Americans say their household costs have risen since the pandemic.
The Biden White House is desperate to appear to be getting a handle on inflation. While we are concerned about how much inflation is eroding wage gains for workers and reducing the incomes people have, especially the most vulnerable, the Biden administration and allies are worried about poll numbers and his agenda.
Rising inflation could also be the death knell for the multi-trillion dollar Build Back Better spending bill. Democratic Senator Joe Manchin of West Virginia has repeatedly expressed concerns that inflation is too high and that this bill would make it worse. His votes id needed for the massive expansion of government to pass.
However, more federal spending is not the answer, but part of the problem. It would exacerbate labor shortages by disincentivizing work, flood most households with even more cash to spend on fewer available goods, and rack up more debt. All of this will continue to stimulate an overheated economy. It’s time to cool things down; throwing cash at the economy isn’t the way.
Read more about what drives inflation in the upcoming policy focus: Understanding Inflation.