Following January’s unexpected surge, the anticipation for the Consumer Price Index (CPI) has seen a significant adjustment, with forecasts leaning towards another notable monthly increase. Despite predictions, the CPI’s monthly rise of 0.4%—the steepest since August—pushed the annual rate to 3.2%, slightly above the anticipated 3.1%.
In a closer examination, the Core CPI, which excludes volatile food and energy prices, also exceeded expectations. It climbed by 0.4% on a monthly basis and reached a year-over-year increase of 3.8%, surpassing the forecasted 3.7%. This marks the lowest annual increase since April 2021.
While goods experienced a deflation of 0.3% over the year, indicating a stabilization, the inflation for services remained persistently high at 5.2% annually. Diving deeper into the data, the so-called SuperCore—Core CPI Services excluding shelter—witnessed a 0.5% monthly jump, escalating to a 4.5% annual increase, the highest since May 2023.
It’s noteworthy that consumer prices have consistently risen each month since President Biden took office, with July 2022 being the sole exception, where prices remained unchanged. This trend has resulted in an overall 19% price increase under the current administration, marking an era of unprecedented costliness.
This inflationary period under President Biden contrasts sharply with the average annual price rise of 1.9% during President Trump’s tenure, translating to an average annual inflation rate of 5.6% under Biden, more than triple the rate observed previously.
The phenomenon of shrinkflation raises questions about corporate greed coinciding with the onset of Biden’s presidency. Moreover, the gap between real wage growth and inflation has widened, significantly affecting the average American worker. Despite a 21% increase in food costs since the beginning of Biden’s term, wages for non-supervisory roles have only seen an 18% rise, highlighting the challenges of maintaining purchasing power in the current economic climate.
In summary, the economic landscape under the current administration is marked by rising consumer prices and a significant disparity between wage growth and inflation, posing challenges for American households striving to keep up with the escalating cost of living.