Great Lakes Wire

While inflation is down from a month ago, the cost of goods continues to remain high and that is forcing Michigan families to make critical decisions on what household items to buy.

On Aug. 10, the Bureau of Labor Statistics (BLS) released the Consumer Price Index (CPI) data for the 12 months ending July 2022. The data showed an 8.5% all items annual increase, which represents a 0.6% drop from last month. Some of the largest contributors were increases in the index for food, shelter and electricity.

"It’s a sign of how far and fast inflation has risen this year that an increase in prices of 8.5% in July on an annual basis triggered a market rally on Wednesday. That’s down from 9.1% a month ago, and the trend is in the right direction, but one month’s respite is far from the end of this punishing inflation bout," the Wall Street Journal (WSJ) Editorial Board said.

According to the BLS, real average hourly earnings for all employees decreased 3%, seasonally adjusted, from July 2021 to July 2022. The change in real average hourly earnings combined with a decrease of 0.6% in the average workweek resulted in a 3.6% decrease in real average weekly earnings over this period.

With the -3.6% wage inflation for July, Michigan's average household income has seen a -$3,559 year-over-year loss, bringing the state's current average household income down to $95,310 annually. 

President Biden took to Twitter last Wednesday, boasting about 0% inflation for July. However, the WSJ Editorial Board said, "The slowdown came largely from volatile energy prices, which had soared in June." Additionally, prices across most of the rest of the economy continued on their upward trend.

Food prices rose 1.1% in July and are up 10.9% over last year. Take-home grocery prices rose at an even faster rate at 1.3% for the month and 13.1% over the past 12 months. The index for shelter climbed 0.5% in the last month and 5.7% in the last year, according to BLS.