President Biden, one week ago, in his State of the Union Address: “We have more to do, but here at home, inflation is coming down. Here at home, gas prices are down $1.50 a gallon since their peak. Food inflation is coming down. Inflation has fallen every month for the last six months while take home pay has gone up.”
Inflation turned higher to start 2023, as rising shelter, gas and fuel prices took their toll on consumers, the Labor Department reported Tuesday.
The consumer price index, which measures a broad basket of common goods and services, rose 0.5 percent for the month, which translated to an annual gain of 6.4 percent. Economists surveyed by Dow Jones had been looking for respective increases of 0.4 percent and 6.2 percent.
Excluding volatile food and energy, core CPI increased 0.4 percent monthly and 5.6 percent from a year ago, against respective estimates of 0.3 percent and 5.5 percent.
Energy also was a significant contributor, up 2 percent and 8.7 percent respectively, while food costs rose 0.5 percent and 10.1 percent respectively.
Rising prices meant a loss in real pay for workers. Average hourly earnings fell 0.2 percent for the month and were down 1.8 percent from a year ago, according to a separate BLS report.
While price increases had been abating in recent months, January’s data shows that inflation is still a force in a U.S. economy in danger of slipping into recession this year.
Yeesh. Seven days after Biden boasted that inflation, food, and gas prices are falling and that take-home pay is rising, new numbers arrive showing that inflation, food, and energy prices are jumping back up again, and real take-home pay is falling. (Note that while gas prices are indeed considerably lower than last June, they’re high by historical standards for the month of January, according to Energy Information Administration records.)
As I mention more and more frequently, this administration has many bad habits, but one of the worst is its inclination to spike the football in victory at any glimpse of good news, only to be quickly overtaken by bad news.