EDITOR NOTE: There’s a huge difference between “Core” inflation and “CPI” inflation. The Fed mainly pays attention to the former, largely dismissing the latter. The former stands at 4%, the latter, under 2%. Big difference. Here’s another one--there’s a difference between headline inflation, and the “experience” of inflation as a nation of Americans, as segments of American society, as localities in different states where the cost of living differs, and on a personal level (personal inflation rate). The Fed and the government are filtering their views of Americans’ individual experiences of inflation in a manner that spreads out the differences like a statistical meat grinder. If they were to view the differences intact--as that’s what defines “individuals”--then they’d realize low-income Americans are 1) hit by unemployment the hardest, and 2) impacted the most by the rise in prices (inflation). The stimulus check is a mere band aid to the financial wound that isn’t clotting for this largely unnoticed segment of society. But as with human tendency, a potentially terminal illness that doesn’t appear directly on your “face” won’t get treated as quickly as something that’s largely hidden from view.
Thanks a boatload Joe Biden, Janet Yellen and Jerry Powell.
Low-income Americans bore the brunt of job losses when the pandemic arrived. Now they’re getting hit hardest by price increases as the economy recovers.
The headline consumer inflation rate in the U.S. remains subdued, at 1.7% — but it masks large differences in what people actually buy.
Some of the biggest price hikes of recent months, for example, have come in gasoline. A gallon of regular is up 75 cents since late last year –- adding more than $60 a month to the budget of someone who fills up with 20 gallons a week.
Food-price inflation is running at more than double the headline rate, and staples like household cleaning products have also climbed.
CPI “inflation” is considerably higher than “Core” inflation that The Fed watches.
Lower-income households general consumer more food as a percentage of their household budget.
“C’mon man, I gave you $1,400 to cover the inequities created by The Federal Reserve.”
Originally posted on Confounded Interest