Inflation is much worse than the government’s statistics and its not going to be transitory. From the I & I Editorial Board at issuesinsights.com:
Both the out-of-touch Biden administration and our betters at the Federal Reserve Board continue to assert that inflation’s no big thing. They’re right. It’s not, unless you work for a living. Then it’s a very big thing indeed.
We were told by all the best “experts” that inflation is ephemeral, a mere blip. The Fed keeps telling us the recent jump in prices is “transient.” Democrats and many of their media friends continue to insist it’s not an issue. Just keep spending, they say. Stimulus!
But calling the recent burst in inflation “transient” or any other such euphemism to suggest it’s like a brief summer cold is not exactly accurate. In fact, it’s wrong.
The recent surge in inflation isn’t likely to go away anytime soon. Indeed, it’s even worse than the numbers now indicate.
In the most recent Consumer Price Index data, year-over-year inflation hit a tad above 5%. That’s the biggest spurt since 2008. In April, it hit 3.6%, nearly twice the recent average. Meanwhile, core prices (excluding volatile food and energy) are rising at their highest pace since 1992, when then-Fed chief Alan Greenspan was forced to nearly double interest rates to kill what many feared would be a bad bout of inflation.
This is no coincidence. In May, real average hourly earnings fell 2.8%, even as employees worked more hours. Let that sink in: Those earning an hourly wage actually took home less pay for working more.
As inflation rises, real wages — that is, earnings adjusted for inflation — inevitably go down. Just as in the 1970s, low-skilled, less-trained and less-schooled workers can’t keep up. Their wages fall behind. That’s the real danger here.