Inflation remains elevated despite a brief dip, according to October’s Consumer Price Index (CPI), released Tuesday by the Bureau of Labor Statistics (BLS). The topline numbers — a 0.0% increase from September and a 3.2% increase from a year earlier — masks the true toll inflation has taken on American families. In fact, it’s entirely possible that, due to rising coal prices, naughty children can now expect Santa to leave Bidenomics in their stockings this Christmas.
“Prices remain stubbornly high, and well above the Federal Reserve’s 2% target,” Senate Minority Leader Mitch McConnell (R-Ky.) said Tuesday on the Senate floor. “Cumulative inflation since the president took office now clocks in at 17.6%. Even as the rate prices are growing, working Americans are growing more frustrated with an expensive new normal.”
Underneath the topline numbers, the CPI report indicated that inflation does indeed remain elevated. The flatline result for the month of October largely reflected falling gas prices, which fell by 5.0% from September after rising by more than 10% in August. But prices continued to rise for electric (0.3%) and gas bills (1.2%), as well as food (0.3%) in October. Prices also rose for medical care (0.3%), shelter (0.3%), and transportation (0.8%). Excluding the more volatile categories of food and energy, the report indicates that prices for all other items rose 0.2% in October and 4.0% over the past year.
While down from last year’s gut-punching figures, those numbers are still up on the housetop.
Inflation remains a source of frustration for most Americans, whose wages simply haven’t kept up. “Unfortunately, what we continue to see is that Americans are getting poorer because we are seeing prices rise faster than earnings,” said Heritage Foundation Research Fellow E.J. Antoni on “Washington Watch.” “All in all, the typical American family today is about $7,400 poorer than when Biden took office.”
“The more we grow the federal budget, the more we end up having to shrink the family budget,” Antoni explained. “That’s precisely what needs to stop, is all of this debt-fueled spending. … People don’t like it. It hasn’t worked, and we need to stop it. We need to reverse it.”
On Tuesday, Speaker Mike Johnson (R-La.) persuaded the House to pass a continuing resolution that would maintain government funding until early next year — a strategic choice to avoid pressure for a massive omnibus spending bill right before Christmas, and kick the question into next year, when House Republicans seeking spending cuts can fight on more favorable ground. “It took decades to get into this mess. I’ve been at this job three weeks. … I can’t turn an aircraft carrier overnight,” Johnson said.
While President Biden has repeatedly claimed credit for lowering inflation, the Federal Reserve plays a much more important role by controlling interest rates. Over the past 18 months, the Federal Reserve has raised the federal funds rate — which then carries over to other forms of interest — from near zero to over 5%. The persistence of inflation may require them to raise interest rates even higher, although current reports suggest they might not do so.
These interest rate hikes impose their own costs on American families. “We are seeing the continuation of relatively high interest rates pummeling people on everything from mortgages to credit card debt and everything in between,” Antoni pointed out. With inflation effectively gobbling up 17% of every dollar, American families may be forced to choose this Thanksgiving between serving the turkey, stuffing, or sweet potato casserole, or they may be forced to visit with Grandma on Facetime instead of in-person — or they will choose to finance their regular holiday traditions through additional credit card debt.
Worse, “every time they raise that interest rate, the government ends up spending more to service its debt. So, this becomes kind of almost a death spiral,” said Family Research Council President Tony Perkins, host of “Washington Watch.” Antoni agreed, “You very quickly get to a point where the cost of servicing the debt becomes so big that it is fueling the deficit, which makes the debt even bigger, which further increases the cost of servicing the debt.”
“This is a problem that they created for themselves,” said Antoni. “One of the key reasons why we have so much government debt today … is because the Federal Reserve artificially kept rates far too low for far too long, and so it basically hid the true cost of that debt.”
“Planning the fiscal future of the country around the assumption that interest rates would remain the lowest they’ve been in 4,000 years, as bond-market researcher Jim Grant has described the interest-rate policies of the 2010s, was not a great idea,” wrote National Review’s Dominic Pino. “Interest on the debt has doubled in just the past two years.”
Many in the media and the administration are frustrated that Biden’s economic record doesn’t make voters feel like they’re sipping hot cocoa by a warm fire. But many voters remember that inflation exploded on Biden’s watch, increasing from 1.7% in February 2021 to 9.1% in June 2022. In the interim, a Democrat-controlled trifecta of the House, Senate, and White House indulged in a multi-trillion dollar spending spree, with Biden pressing Congress to spend even more than they did.
Voters just wish prices would return to the levels they were at three years ago, while Biden is demanding thanks that prices are still rising — but only by a little bit more than they should be. Voters have understandably reacted the way a child would who unwrapped a package on Christmas morning to find this note, “I wanted to get you the latest new toy, but I didn’t want to pay for it, so I got you the batteries instead.”
It’s the thought that counts, right?
Joshua Arnold is a senior writer at The Washington Stand.
