Prices increase more than expected; Wall Street takes a dive
By CASEY HARPER
THE CENTER SQUARE SENIOR REPORTER
(The Center Square) — New inflation data released Tuesday showed that prices rose more than expected during August, putting more pressure on Americans, many of whom are already struggling to make ends meet.
Some economists and lawmakers quickly criticized President Joe Biden after the data came out, and the Dow Jones plummeted 800 points in response.
The S&P 500 dropped 4.3%, its largest single day decline since June 2020 during the height of the pandemic. The Nasdaq Composite index fell 5.2%, also its worst day since June 2020. The Dow Jones Industrial Average dropped nearly 4% to 31,105.
E.J. Antoni, an economist at the Heritage Foundation, said the inflation rate has grown “nearly six times what it was when Biden took office.”
“The reality is that American families are still losing ground because of his policies,” he said. “People are demonstrably worse off today than when Biden became president. Real wages have fallen 5.5%, the annual equivalent of $3,000 for the average American.
“Meanwhile, home affordability has plummeted 35%, monthly savings have collapsed 75%, and credit card debt has risen 22%. Americans have been financially crushed by the Swamp’s monetary malpractice and fiscal irresponsibility of Washington.”
Notably, the Bureau of Labor Statistics Consumer Price Index pointed out that a range of goods and services became more expensive. Those increases have been hidden because of a significant drop in gas prices that put the overall price index at a small increase of 0.1% for the month of August.
Food prices, for instance, have continued to increase at an aggressive rate.
“The food at home index rose 13.5% over the last 12 months, the largest 12-month increase since the period ending March 1979,” BLS said. “The index for other food at home rose 16.7% and the index for cereals and bakery products increased 16.4% over the year. The remaining major grocery store food groups posted increases ranging from 9.4% (fruits and vegetables) to 16.2% (dairy and related products).”
Stocks tumbled at the open of trading over the inflation news.
President Biden, meanwhile, released a statement Tuesday morning saying he intends to “celebrate” the passage of the Inflation Reduction Act at an event Tuesday afternoon.
However, Republican lawmakers pushed back, saying the latest inflation numbers are not worth celebrating.
“While the White House will undoubtedly celebrate today’s inflation report, families are still suffering,” U.S. Sen. Rick Scott, R-Fla., said. “Food prices are way up since Biden took office and still rising higher.
“Families in my state and all across the country don’t want a consolation prize. They want lower prices,” he added.
Lawmakers also point out inflation has far outpaced wages. Provident Bank based in New Jersey released survey data over the summer showing that 83% of Americans are cutting back spending to deal with inflation.
“In Wyoming and across the country, families are cutting back their spending and worrying about paying their bills,” U.S. Sen. John Barasso, R-Wyo., said. “Yet later today, the White House is planning to celebrate the reckless spending policies and tax hikes that have caused this pain and suffering. The president and his allies are out-of-touch with working families.”
Mr. Antoni also pointed a finger at the Federal Reserve.
“While the Federal Reserve is belatedly beginning to do its job by reducing money creation and allowing interest rates to rise, it is working at cross purposes with Congress and the president, who continue their profligate spending and borrowing,” Mr. Antoni said. “To avoid a worsening recession, our governmental and monetary leaders must stop the reckless spending, borrowing, and money-printing, while also embracing policies that will unleash American energy production.”
Casey Harper works at The Center Square’s Washington, D.C., bureau. Center Square Executive Editor Dan McCaleb contributed to this report.