14 July 2023
Inflation may be on the decline, but it doesn’t mean that prices are going down. The Consumer Price Index shows a 3% increase from June 2022 to June 2023, but it’s important to note that the formula used to calculate inflation has changed over time. If we still used the methodology from 1980, inflation would be in the double digits.
While it’s good news that prices are rising at a slower rate, the reality is that the cost of living continues to burden average Americans. Many families are cutting back on everyday items like toothpaste and toilet paper. The demand for cheaper brands and budget stores is rising, impacting manufacturing giants and benefiting discount retailers.
The financial stress is evident, with surveys showing that over 60% of the population is living paycheck to paycheck. Back-to-school spending is projected to decline for the first time in nine years, reflecting the struggles caused by inflation.
Housing affordability is also a major concern. Even a middle-class income is no longer sufficient to rent a decent home or apartment, with rents becoming increasingly unaffordable in major cities. For example, a small apartment in central Harlem, New York City, is being rented for $2,300 per month, with critics describing it as a “glorified dungeon.”
The national debt continues to skyrocket, with a trillion dollars added in just five weeks. This excessive spending contributes to inflationary pressures. Despite the economic challenges, the Federal Reserve is considering another interest rate hike, which could further strain the economy.
Small and mid-size banks are feeling the pain, as loan losses increase due to rising interest rates. The overall picture is one of worsening economic conditions, and our leaders seem to make poor decisions that exacerbate the problems rather than solving them.
It’s important not to be fooled by mainstream media claims that inflation is under control and the economy is improving. Long-term problems persist, and the actions taken by those in power often make matters worse. The path we are on is unsustainable, and urgent action is needed to address the root causes of these issues.