The U.S. Department of Commerce revealed that a key inflation metric rose to its highest level since the early 1990s.
According to the Bureau of Economic Analysis, the Personal Consumption Expenditures Price Index — which the Federal Reserve uses as a key guide for monetary policy decisions — has risen 4% between June 2020 and June 2021.
Factoring out food and energy costs — which rose by 24.2% and 0.9% respectively — the metric saw a 3.5% increase, therefore reaching its highest level since July 1991.
Beyond rising inflation, American households increased their expenditures. The Bureau of Economic Analysis explains:
The estimate for June personal income and outlays reflected the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic. Government social benefits associated with pandemic-related assistance programs declined in June. The full economic effects of the COVID-19 pandemic cannot be quantified in the personal income and outlays estimate because the impacts are generally embedded in source data and cannot be separately identified.
Real disposable income, however, decreased by 0.5% in June despite an increase in personal income.
A similar report from the Bureau of Labor Statistics revealed that “average hourly earnings” in the United States have risen year-over-year by 3.6%. However, when considering inflation — specifically through the Consumer Price Index, which has risen year-over-year by 5.3% — “real average hourly earnings” have fallen by 1.7% over the past year.
An American making $50,000 per year would therefore witness his annual earnings fall by $850.
As The Daily Wire previously reported, the Federal Reserve is refusing to taper its aggressive monetary stimulus despite the accelerating inflation rate. A statement from the Federal Open Market Committee after the conclusion of its most recent two-day meeting confirms that the bank will keep targeting a near-zero interest rate and purchasing $120 billion in assets every month.
President Joe Biden likewise holds the position that rising inflation is a temporary phenomenon.
“I want to be clear,” he said in a recent speech. “My administration understands if we were to experience unchecked inflation over the long-term, that would pose a real challenge to our economy. So, while we’re confident that isn’t what we’re seeing today, we’re going to remain vigilant about any response that is needed.”
The Department of Labor is scheduled to reveal its data for July inflation on August 11.