Democrats may be anxious to declare victory over inflation, and the July inflation report, which showed 0 percent inflation month-over-month, gave President Biden the opportunity to shout “zero inflation” for the world to hear.
But the consumer-price index is still up 8.5 percent from a year ago. The CPI reflects an average of prices across hundreds of categories, and some of the prices that have exploded most over the past twelve months are some of the products that Americans buy regularly.
The prices of basic food staples show some of the highest increases in the CPI report. At breakfast, the price of eggs is up 38 percent year-over-year, and the price of cereal is up 16.4 percent. Coffee is up 20.3 percent, and milk is up 15.6 percent.
For a sandwich at lunch, bread is up 13.7 percent, and lunch meat is up 18 percent. You could save a little by opting for a peanut-butter sandwich instead, but peanut butter is still up 13.1 percent over the past twelve months.
At dinner, chicken is up 17.6 percent, and potatoes are up 13.3 percent. Butter to make mashed potatoes will cost you 22.2 percent more than it did last July.
All of these basic food categories are pulling inflation up, not pushing it down. Much of the reason for the flattening of the CPI between June and July was declining gasoline prices compensating for a continued increase in food prices.
Americans are no doubt happy that gasoline has declined (although the nationwide average is still nearly 40 cents higher than it was the week Russia invaded Ukraine and nearly 80 cents higher than it was a year ago), and the Bureau of Labor Statistics numbers are consistent in the way they weight different prices to calculate the average. But that doesn’t change those nasty numbers at the grocery store, and overall prices rising 8.5 percent in a year still means most people have seen a real-wage cut.
The U.S. still has a ways to go before inflation ceases being the top economic problem.