Over the weekend, this article caught my eye.
Red-hot inflation is costing the average US household an additional $296.45 in expenses as surging food and fuel costs stretch budgets, according to calculations provided to The Post.
Ryan Sweet, a senior economist at Moody’s Analytics, crunched the numbers after the latest Labor Department data showed consumer prices jumped 7.9% in February. He arrived at the figure by comparing average US household spending last month to what would have been spent in 2018 and 2019, when inflation paced at 2.1%.
“Unfortunately, things will get worse before they get better. Higher energy prices in March are going to boost the [Consumer Price Index],” Sweet told The Post.
. . .
Energy prices jumped a staggering 25% in February compared to the same month one year earlier. The food index jumped 7.9% — with meal staples such as beef and chicken experiencing some of the sharpest increases ... The February surge marked the highest annual rate of increase in consumer prices since 1982.
There's more at the link.
Bear in mind that Mr. Sweet is working off official inflation figures, which (as we've discussed in these pages many times) are not accurate. They're designed to significantly underestimate the actual rate of consumer inflation, which I currently estimate (based on my own consumer spending and that of people I've asked about it) to be closer to 25% on average. If that rate were applied in Mr. Sweet's calculations, the amount each month would probably be at least double the $296.45 he estimates.
Be that as it may, even using his calculations, the average American is spending an additional $3,500+ every year on necessities this year, compared to a year ago. How many of us received a raise in pay sufficient to fund that extra expenditure (not to mention the taxes payable on our increased income)? I sure didn't, and I'm willing to bet most of my readers didn't either.
Inflation is like a tax. We're all paying it, whether we like it or not. We can get out of paying it - but only by not buying what we need. Welcome to the new IRS - the Inflation Revenue Service!
Peter
6 comments:
Back in late January my employer announced that the baseline increase this year would be changed to 3.5% "to keep up with inflation". I just laughed. Yes, 3.5% is better than 3%, and is pretty generous for a company that is still recovering from the pandemic lockdowns, but most of us aren't even going to notice it.
When I had my annual review/pay raise I noted to my boss that the official inflation rate meant I was getting a pay cut.
While she agreed, because we work for a big corporation, there wasn't any wiggle room in the annual raise and it wouldn't surprise me if lots of people in my shoes aren looking for a new job.
Try this, gas here was $1.52 now $3.79 , groceries because we remember what it cost just 6 months ago, up 50 % overall at checkout. The average person is being slaughtered by the most incompetent, corrupt leaders in the history of man.
Current inflation rate was 16% at the start of the month. Will go higher when fuel prices start effecting all other prices.
http://www.shadowstats.com/alternate_data
Don't worry. Congress just approved a 21% pay hike for their staff because they are soooo overworked.
I and several of my family members recently got about $3,000 from my late grandmother's estate. Good thing.
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