Skip to comments.Feds Applaud Inflation Despite Drop in Average Income
Posted on 05/16/2014 8:46:57 AM PDT by Kaslin
The BLS released CPI for April this morning. Data shows prices ticking higher with food up substantially for the third month.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment.
The indexes for gasoline, shelter, and food all rose in April and contributed to the seasonally adjusted all items increase. The gasoline index rose 2.3 percent; this led to the first increase in the energy index since January, despite declines in the electricity and fuel oil indexes. The food index rose 0.4 percent for the third month in a row, as the index for meats rose sharply.
U.S. consumer prices recorded their largest increase in 10 months in April, pointing to some inflation in the economy.
The Labor Department said on Thursday its Consumer Price Index increased 0.3 percent last month as food prices rose for a fourth consecutive month and the cost of gasoline surged.
That was the biggest rise since June last year and added to March's 0.2 percent rise.
In the 12 months through April, consumer prices rose 2.0 percent after gaining 1.5 percent in March. That was the biggest increase since July last year and in part reflected prices coming off last year's low base when energy costs decreased.
In the 12 months through April, the core CPI increased 1.8 percent. That was the biggest gain since August last year and followed a 1.7 percent rise in March.
Real Average Earnings Decline
Higher prices in this competitive environment generally lead to falling real wages. Sure enough, the BLS reports Real Average Hourly Earnings Fall 0.3 Percent in April
Real average hourly earnings for all employees decreased 0.3 percent from March to April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This decrease stems from unchanged average hourly earnings combined with a 0.3 percent increase in the Consumer Price Index for All Urban Consumers
Real average weekly earnings fell 0.3 percent over the month due to the 0.3 percent decrease in real average hourly earnings combined with an unchanged average workweek.
Real average hourly earnings fell 0.1 percent, seasonally adjusted, from April 2013 to April 2014. The decrease in real average hourly earnings, combined with a 0.3 percent increase in the average workweek, resulted in a 0.2 percent increase in real average weekly earnings over this period.
Real average hourly earnings for production and nonsupervisory employees fell 0.1 percent from March to April, seasonally adjusted. This decrease stems from a 0.1 percent increase in average hourly earnings combined with a 0.3 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers
Success or Failure?
The Fed is hell bent on producing 2% inflation. The Fed succeeded, but median real wages have not kept up.
Obama's solution, now embraced by Mitt Romney and other prominent Republicans is to hike the minimum wage (see Mitt Romney, Tim Pawlenty, Rick Santorum Call for Higher Minimum Wage; Tweedle-Dum vs Tweedle-Dee)
My solution is to stop all the manipulation by the Fed, by the president, by Congress, and by state and local governments. Such manipulation not only causes the wage inequality that nearly everyone moans about, it also has led to various bubbles of increasing amplitude over time.
This is unreal. Actual prices are through the roof.
Meat has doubled since Obama took office.
They’ve found their formula for keeping inflation in check —
take discretionary money out of people’s pockets and that way they can’t buy those expensive avocados
These a$$hole$ love rising prices.
All the numbers go up, and they can claim that the stock market has risen.
They use it as an excuse to raise taxes.
It guts normal peoples’ savings, reducing them to zero, making us dependent on the government.
The ruling elite’s pay and pensions rise, according to the rate of inflation.
Social Security recipients get a pi$$-a$$ increase, and the government crows about it.
For the ruling elite, inflation is the gift that keeps on giving.
Yes, by removing the prices of every single consumer product that people purchase to subsist from the metric...