Former President Reagan economist Art Laffer talks about inflation, recession concerns, and the impact of the election on the economy.
President Biden hailed December's inflation report as a sign of progress in combating high prices. The data suggested the road back to normalcy could be bumpy.
“We saw the prices of goods and services important to American families decline throughout the year, including a gallon of gas, a gallon of milk, a dozen eggs, toys, electronics, rental cars, and airfare.”Biden he said in a statement Thursday.
According to the report, the consumer price index, which broadly measures the prices of daily necessities such as gasoline, food, and rent, rose 0.3% in December from the previous month. Overall prices increased by 3.4% compared to the same period last year.
As high inflation weighs down Americans, 401(K) withdrawals from those in need surge.
All of these numbers were higher than expected amid soaring food, utility and rent costs, highlighting the challenge of timing price increases in the economy.
President Biden speaks to guests at electrical equipment manufacturer Ingeteam Inc. on August 15, 2023 in Milwaukee, Wisconsin. (Photo by Scott Olson/Getty Images/Getty Images)
Biden acknowledged that there is “more work to do to lower costs for American families and American workers,” and said he would continue to push big companies to pass on savings to consumers as prices fall. Stated.
Inflation has fallen significantly from its peak of 9.1% in June 2022, but remains well above the Federal Reserve's 2% target. And just before that, compared to January 2021, the inflation crisis has begunprices rose by a whopping 17.6%.
Inflation rate rises faster than expected in December as prices continue to rise
“December was clearly a setback in the two-steps-forward, one-steps-back inflation war,” said Robert Frick, business economist at Navy Federal Credit Union. “Half of the increase was accounted for by shelter prices, with little prospect of relief as rents remain high and homeownership costs rise.Consumers felt the most immediate pain in December. “These are the two products Americans are most sensitive to: rising food and energy prices.” “
caused by high inflation severe financial pressure Most American households are being forced to pay more for everyday necessities like food and rent. Food prices have increased 33.7% since the beginning of 2021, and shelter costs have increased 18.7%, according to FOX Business calculations. Meanwhile, energy prices have increased by 32.8%.
Pedestrians and shoppers in New York's SoHo neighborhood on February 26, 2023. (Photographer: Gabby Jones/Bloomberg via Getty Images/Getty Images)
The burden falls disproportionately on low-income Americans, whose already maxed-out paychecks are heavily affected by price fluctuations.
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The typical American household had to pay $211 more per month in December to buy the same goods and services as they did a year ago. Inflation remains high, according to new calculations from Moody's Analytics. Americans are paying an average of $1,020 more each month than they did during the same period two years ago.
The latest survey results were released amid growing pessimism among American households about their financial situation under the Biden administration.
a recent research According to a study published by Bankrate, 50% of Americans say their financial situation has worsened since the financial crisis. 2020 Presidential Election. By comparison, only 21% believe that their financial situation has improved, while 26% believe that the situation has not changed.
“The economic plight of the next 12 months may determine whether it was wise for President Biden to promote his brand of Bidenomics,” said Mark Hamrick, senior economic analyst at Bankrate. Ta.
