President Joe Biden last week claimed not only that July’s 8.5% inflation is “good economic news,” since it’s less than June’s 9.1% rise in the Consumer Price Index. He also crowed that such “success” is “what happens . . . when you build an economy from the bottom up and the middle out.”
That is, he’s arguing that he’s building the economy he wants — despite a few bumps on the road caused by Vladimir Putin and other evil-doers. Problem is, if it doesn’t deliver the miracles he imagines, he has instead stuck the nation in a grim “new normal” of economic stagnation.
Notably, the “good” inflation news was followed Thursday by word that new unemployment applications continue to creep up; they’re now at the highest level since November.
Yes, the economy added 528,000 jobs last month, to finally exceed the total before COVID hit in early 2020. But that’s with a larger working-age population, and (most troubling) a smaller share of that population employed or at least looking for work.
And, crucially, with real wages declining as inflation exceeds annual raises and other nominal gains. (Another fact Biden ignores as he brags that “wages are up.”)
Also, the slight easing last month is chiefly about gasoline prices dropping to a still-nosebleed near $4-a-gallon, and that largely because people cut back on driving, reducing demand.
They can’t cut back much further: America’s already down to the miles-driven level of the pandemic summer of 2020. Grocery prices, too, rose 1.3% in July and are up 13.1% from last year, their fastest pace of increase since 1979.
Plus: Core CPI, which excludes volatile food and energy prices, stayed unchanged at an annual rate of 5.9%, so underlying inflationary pressures are still going strong. And producer price inflation, 9.8% for the 12 months ending in July, ensures more future pain for consumers.
All this “good economic news,” don’t forget, comes at a moment when the United States is in a recession.
Yes, Team Biden and its enablers insist suddenly that two straight quarters of economic shrinkage no longer define a recession, just as they gave us an “Inflation Reduction Act” that they admit does nothing to reduce inflation — but will raise taxes, further slowing the economy.
And last year they gave us an “American Recovery Act” that did nothing for the private-sector economy but did start the inflationary cycle that they for months insisted was “transitory.” We’ve now had 15 months in a row of CPI above 5%, and it’s not getting below that any month soon.
It’s all proof, says Biden, that “the economic plan is working.”
If this is “working,” we’d hate to see “not working.” But we expect no less from the author of our new normal, who’s as divorced from reality on the economy as he is on everything else.
* Article from: The New York Post
