Great Lakes Wire

On Dec. 13, the newest Consumer Price Index report for the Midwest Region, including Michigan, was released showing an overall slight decrease in the annual inflation rate at 6.8%, which economists say is a good sign but is still much higher than pre-pandemic levels. The prices of goods continue to rise as workers are taking on second jobs to make ends meet. President Biden was pleased with the report while his critics said prices and overall inflation are still very high causing Americans to lose money overall in the last two years.

“Inflation is a tax on ALL Americans. Eggs are UP 49.1% Airline Fares are UP 36% Milk is UP 14.7% Electricity is UP 13.7% Groceries are UP 12% Chicken is UP 12% Gas is UP 10.1% Baby Food is UP 10.9%,” House Republicans wrote in a Dec. 13 Twitter post.

The U.S. Bureau of Labor Statistics issued its latest Consumer Price Index (CPI) summary on Dec. 13, which found that the rate of inflation over the last 12 months for the Midwest Region, including Michigan, stands at 6.8%, effectively reporting that significant inflation is still present in the economy. In the last year, food costs have risen by 11.7%, energy costs have increased by 11.0%, and core inflation, or all items less food and energy, has increased by 5.5%.

According to the Wall Street Journal, the newest CPI report marks the slowest annual growth rate since December 2021 but is still significantly higher than the Fed’s prediction of a 2.1% annual increase. Core CPI rose 6% in November, easing from October's 6.3%. September's 6.6% increase was the biggest jump since August 1982. The Federal Reserve is expected to lift interest rates by 0.5 percentage points on Wednesday. In addition to the moderation in price increases, it was reported that grocery prices rose by 0.5% in November, slightly higher than October's pace. This increase was due to rising prices for bakery products and fruit and vegetables. Despite the moderation in price increases, inflation remains high and has spread to more labor-intensive services as wages have surged in a tight labor market.

Jerome Powell, the Chair of the Federal Reserve, recently said that the price trends for services, excluding housing, reflect inflationary pressures in the broader economy and are important in predicting where inflation will go from here.

President Biden praised the inflation report noting the annual rate was lower than experts predicted. In a Dec. 13 tweet, the President said Americans should be “optimistic” heading into the new year.

Fox Business reported that inflation is beginning to slow although prices of goods remain high. "Both topline and core CPI inflation slowed in November, showing some measure of progress in the ongoing struggle to tame inflation," said Kayla Bruun, an economic analyst at Morning Consult. "That said, price levels remain quite elevated compared with a year ago for many categories, and these high prices continue to put pressure on household budgets and force trade-offs with purchasing decisions." The cost of gas, used cars and trucks and airline tickets decreased, while food, energy and shelter, being the most significant according to the BLS, rose. Rent costs showed a 7.2% annual increase.

Despite Tuesday’s report on inflation, Fox Business also reported that many Americans are taking on second jobs to fight high costs, especially on shelter, energy and food prices. Americans are turning to their savings accounts as well as increasing credit card debt to adjust to the cost of living. In November, the economy saw Americans add 165,000 in second jobs, or gig work. "An increase in part-time work as more people take on side hustles to make ends meet buoyed the headline payrolls number in November," said Bill Adams, Comerica Bank chief economist.

The Daily Signal reported the average American has lost approximately $7,100 since President Biden took office. The Daily Signal acknowledged the slow in the inflation rate with the newest CPI numbers but claimed this has not corrected the prices of goods, which are still seeing increases. “Although the slowdown in inflation is certainly welcome, it’s not a sign of things to come. The latest data illustrate why families cannot afford to live in Biden’s America,” EJ Antoni, a research fellow for regional economics in the Center for Data Analysis at The Heritage Foundation, said in a Tuesday report. “Under Biden, prices have risen so much faster than wages that the average family has lost $5,800 in real annual income. That loss is thanks to the ‘hidden’ tax of inflation, caused by the Biden administration and congressional Democrats’ policies,” Antoni said.