Prices Continue to Increase as Real Wages Shrink

Prices Continue to Increase as Real Wages Shrink

September 13, 2022

Economists expected the Consumer Price Index to fall in August, but the costs of goods and services actually increased month over month. Over the past year, prices have risen 8.3 percent, remaining near 40-year highs.

Prices for essentials like energy, housing and groceries continue to increase, wreaking havoc on working families’ finances. Gas prices are more than 25 percent higher than one year ago and the cost of groceries is rising at the fastest pace since 1979.

CNBC: The food index increased 0.8% in August and shelter costs, which make up about one-third of the weighting in the CPI, jumped 0.7% and are up 6.2% from a year ago.

Medical care services also showed a big gain, rising 0.8% on the month and up 5.6% from August 2021. New vehicle prices also climbed, increasing 0.8% though used vehicles fell 0.1%. . .

Within the jump in food costs, bread prices rose 2.2% on the month and are up 16.2% from a year ago. Eggs surged another 2.9% and are up 39.8% for the 12-month period, and canned fruits increased 3.4% and 16.6%, respectively.

Wage gains are also failing to keep up with rising costs. The average hourly pay, adjusted for inflation, is down 2.8 percent over the past 12 months.

Bottom Line: Reckless spending in Washington has fueled out-of-control inflation, and Americans are taking a pay cut as a result. 

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