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President Joe Biden claims the latest inflation figures are “good” news. They’re not, of course, and another economic report makes them even grimmer.
Prices are still 8.5% higher than last year, the sharpest uptick in 40 years, and would be up even more if not for a small drop in energy costs. Plus, productivity fell again during the second quarter, making the 2.5% year-over-year decline the worst on record.
Yet on Wednesday, Biden boasted of “0%” inflation in July, meaning it hadn’t gotten any more outrageous than in June. Though gas dipped 7.7%, food costs rose yet again, continuing a months-long trend that brought the 12-month climb to a painful 10.9%, the steepest since the Jimmy Carter stagflation days of 1979.
And the slip in gas-pump prices comes from drivers cutting back on trips, not an increase in supply: Demand fell to 8.5 million barrels a day, matching the level in July 2020 when the pandemic kept millions indoors.
Cutting back on food, of course, is harder.
And while gas prices today — $4.15 a gallon, per the Energy Information Agency — may be better than the $5.11 rate in June, it merely means Americans are paying “only” 69% more than when Biden took office, rather than 108% more.
Even more troubling is the productivity plunge, down 4.6% last quarter after a whopping 7.4% drop in the year’s first three months. That drove the biggest year-to-year drop in hourly output since the Labor Department began keeping records in 1948. With worker pay rising at the same time, unit labor costs rose 10.8%.
All that means workers are being paid more and putting out less; good luck trying to curb inflation. Without greater productivity, companies must raise prices to afford higher wages.
It’s a grim picture, no matter what Biden & Co. say. And most of the blame lies with him and his fellow Dems, who’ve fueled demand with needless spending, made war on gas supplies and generally slammed producers with new regulations.
Biden can pretend the story is somehow changing, but reality won’t — until his policies do.
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