The index’s rise was driven largely by energy costs soaring by 5% during the month of May and transportation expenses increasing nearly 3% — a phenomenon that occurred as prices at the pump continually reach new highs and surpass a national average of $5 per gallon.
“Businesses are being forced to raise prices, or succumb to shrinkflation, as transportation of goods goes up,” Job Creators Network CEO Alfredo Ortiz said in a statement provided to The Daily Wire. “All of this leads to Americans becoming poorer than ever.”
The news comes days after the Bureau of Labor Statistics announced that the Consumer Price Index (CPI) rose 8.6% over the same period, thereby hitting a new four-decade record. As with businesses, consumers are especially pressed by energy prices — fuel oil, gasoline, utility gas service, and electricity costs rose by 107%, 49%, 30%, and 12% year-over-year, respectively. Likewise, the entire economy is enduring a shortage of new and used vehicles, for which prices respectively increased by 13% and 16%.
When businesses face higher costs, they are forced to pass some of the expenses onto consumers to remain profitable — pushing up prices for households as a result.
“Biden has created an economic mess,” Ortiz added. “He dug this hole with reckless government spending and regulations, now the economy is spiraling, and the hole is digging itself deeper even with Biden’s inaction.”
Indeed, President Joe Biden attributed the higher prices to Russian President Vladimir Putin’s invasion of Ukraine.
“Putin’s Price Hike hit hard in May here and around the world: high gas prices at the pump, energy, and food prices accounted for around half of the monthly price increases, and gas pump prices are up by $2 a gallon in many places since Russian troops began to threaten Ukraine,” Biden said in a statement. “Even as we continue our work to defend freedom in Ukraine, we must do more — and quickly — to get prices down here in the United States.”
Biden also called for Congress to “make the wealthiest Americans and big corporations pay their fair share” and thereby “reduce this inflationary pressure even more.”
The dismal inflation news triggered a Monday selloff on Wall Street. The Dow Jones Industrial Average fell nearly 3%, the S&P 500 fell about 4%, and the Nasdaq fell 4.7%. Last week, the Dow fell 2.7%, the S&P fell 2.9%, and the Nasdaq fell 3.5%.
The Biden administration, however, has deflected from poor stock market performance.
“So, as you know, we are watching — we’re watching closely,” White House Press Secretary Karine Jean-Pierre said when asked about plummeting asset prices. “We know families are concerned about inflation and the stock market. That is something that the President is — is really aware of. And so, look, we face global challenges. We’ve talked about this. This is — we’re not the only country dealing with what we’re seeing at the moment as it relates to inflation.”
Jean-Pierre then argued that the Democrats’ $1.9 trillion American Rescue Plan led to a “historical economic boom,” especially in relation to the labor market. Although unemployment remains low and nominal wages increased between May 2021 and May 2022, real wages dropped by 3% due to the faster inflation rate.