Economists Give Painful New Projection for US as Biden's Inflation Runs Rampant
Surviving in President Joe Biden’s America is getting harder and harder for workers who find themselves falling behind as costs gobble more and more of their paychecks.
As noted by Trading Economics, inflation was at 1.4 percent when former President Donald Trump left office, then spiked rapidly during the first months of the Biden administration.
Although the Biden administration for months rejected claims that its spending was triggering inflation and tried to spin the rise in costs as a transitory blip, even the Federal Reserve now admits the inflation picture will not improve soon, according to KATV-TV.
On Wednesday, Federal Reserve Chair Jerome Powell said the causes of inflation were “greater and longer-lasting than anticipated.”
The Fed, which in June said inflation for the year might hit 3 percent, adjusted its prediction to 3.7 percent, with a possible mark of 4.2 percent for the year when including rising energy and food costs. The translation for workers is that making more might not mean making enough.
“Some of the gains we had seen for workers in certain categories, the increases looked good, but not if you have 5 percent inflation,” said Jim Butkiewicz, an economist at the University of Delaware.
Recent Bureau of Labor Statistics figures showed that within the 5.3 percent overall increase in costs from a year ago, gasoline prices were up 42 percent, beef prices were up 14 percent, lumber prices were up 10 percent and egg prices were up 10 percent.
One of the factors driving price increases is that wages have increased as employers try to attract help, leading to a spiral in which wages and prices keep rising.
As the spiral continues, the National Association for Business Economists has reduced its forecast for Gross Domestic Product growth, according to CNN.
In May, the group’s economists projected 6.7 percent growth, but that is now down to 5.6 percent.
Growth in the third quarter of the year is now projected at an annualized pace of 4 percent, down from May’s estimate of 6.6 percent.
The group also upped its estimate of the toll inflation would take on workers, projecting consumer prices in the coming fourth quarter of the year will be 5.1 percent above last year’s levels, far above the prediction of 2.8 percent the group made in May.
In a statement, Republican Sen. Rick Scott of Florida said it’s no secret that the White House is to blame for inflation.
“Reckless government spending causes inflation. We’ve seen the disastrous consequences of the Democrats’ radical spending plans in consistently rising inflation month after month. We know Democrats won’t stand up and fight for American families. They only care about getting their liberal wish list, no matter the cost,” he said on Friday.
“There will be a day of reckoning for this, and unfortunately, American families will pay the price if Democrats have their way. It’s time to say enough. Republicans won’t raise the debt ceiling. We won’t cut Democrats another blank check and allow them to keep hurting families with insane spending and raging inflation. We won’t let the total lack of accountability in Congress continue.”
Republican Rep. Steve Scalise of Louisiana said the $3.5 trillion spending bill Democrats want to pass would only make inflation worse, according to Fox Business.
“President Biden’s agenda has dramatically increased inflation, and they’re trying to pour gasoline on that fire,” Scalise said.
“[Democrats are] seeing how families have tied the increase in spending in Washington to higher inflation, and if you add trillions in new spending as well as trillions in new taxes, you’re only going to make inflation worse.”
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