I'm sure readers noticed the latest official inflation figures, released yesterday. They've been described as "the biggest month-on-month jump in core consumer prices since 1981". One analysis points out:
Overall prices are up 4.2 percent year-over-year, which is three times the rate of inflation under Joe Biden than under President Trump. Inflation hurts the lower and middle economic class much harder; and the specific inflation sectors show massive increases on the goods and services that blue collar workers use most.
It is specifically the Biden economic policies that are to blame for the scale of these increased prices. Inflation of this scale is an outcome of policy.
Biden is focused on helping multinationals and Wall Street; President Trump was focused on helping small businesses and Main Street. We are now seeing the impact from these two differing economic priorities.Regular unleaded gasoline is up a whooping 51.9 percent from last year. Higher gas prices directly hit the middle class the hardest and also increases the cost of transporting all goods. Keep in mind this is a snapshot of prices approximately six weeks ago and gasoline prices have been rising even more rapidly recently. Not good news.
. . .
The rapid increases in price for food and gasoline are hitting the middle-class hard. This will have a downstream effect on more luxury items and durable goods. Spend more on food/gas and you might not be able to purchase that new table you wanted. Durable good inventories increase and layoffs in those sectors begin.
There's more at the link.
However, as always, the "official" inflation rate is a lie. It's selectively calculated, leaving out many of the costs ordinary consumers like you or I must pay, instead substituting them with bureaucrats' imagined and made-up factors in order to deliberately keep down the official inflation numbers. We've discussed that at great length recently. (For a good, up-to-date explanation of how that works, see here. It's worth reading that article in full.)
As just one example, Joe Carson puts housing inflation into perspective. Bold, underlined text is my emphasis.
Inflation has arrived, evident by the 4.2% gain in the consumer price index over the past twelve months. But the most significant increase since 2008 still is not fully capturing "experienced" inflation since it is missing the rise in housing inflation ... Owners rent, which accounts for roughly one-third of the core index, is up only 2%, or 100 basis points below the core reading. In 1995, the 3% core reading included an even bigger 3.5% rise in owners' rent. So the rise in core inflation in 2021 is much broader than what happened more than two and half decades ago.
More importantly, as big and broad of an increase in April's consumer prices is, it still does not fully capture the actual rise in consumer inflation. Housing prices are up 18% in the past twelve months, a record increase; nine times the increase in owners' rent. The old CPI included house prices. Inserting house prices in place of the non-market owner rents, reported inflation would have been twice the 4.2% gain.
Again, more at the link.
So, if Mr. Carson is correct (and I believe he is), the inflation rate should have been reported as 8.4%, not 4.2%. What's more, that higher rate still doesn't take into account all the other cost factors (apart from housing) that plague consumers, but are carefully excluded from the official calculations, lest they make things look even worse. We've seen in the past how reliable private sources such as Shadowstats and the Chapwood Index have consistently estimated the true inflation rate to be between three and four times higher than the official numbers. I believe them.
Therefore, here's a suggestion, based solidly upon historical economic reality.
To know the true rate of consumer inflation in the USA, take the official rate declared by the government and multiply it by 3½. The result will be much closer to reality.
I'll be applying this rule of thumb from now on. I think it'll be a far more reliable indicator of economic reality. By that measurement, the real rate of consumer inflation in the USA today is probably around 14.7% - and it's getting worse.
Makes you think, doesn't it?