The US Economy Is TANKING — Here’s What You Need To Watch Out For
(LibertySociety.com) – On July 13, the Department of Labor announced June’s inflation numbers, which hit an all-new high. Although economists expected the number to rise to about 8.8% annually, it climbed to 9.1% instead, which is the highest it’s been since 1981. Unfortunately, out-of-control inflation affects everything from the price of real estate and utilities to heat and cool American homes to transportation. With US citizens already struggling to stay afloat financially, the report is bad news for the United States overall.
How Inflation Affects Americans
The outrageous percentage increase does not even include the rise in prices for food and gasoline, which are evaluated separately. However, a quick look at grocery store prices shows the cost of products overall up about 12.2% year over year, and fuel up a startling 59.9% since the same time in 2021. Although some experts were certain there would be some relief in the cost of clothing, that too sits 5.2% higher than last June.
Since wages are not keeping up with the lightning-fast pace of inflation, Americans are essentially taking a pay cut because their dollars are not stretching as far as they used to in recent years. While job growth numbers look good and there seems to be plenty of work to go around, it doesn’t discount the fact wages are stagnant and the cost of living across the nation is skyrocketing.
To combat rising inflation, the Federal Reserve is trying to slow down the economy by raising interest rates. If it costs more to finance a new house, or a new car, potential buyers may choose to wait until rates lower. If businesses have to pay higher rates to operate or borrow money, they may choose to not expand or to reduce their offerings. These types of actions usually result in people reducing their spending and thinking twice before making major purchases.
If Americans aren’t spending, the economy suffers and could push the country into a recession. It doesn’t happen overnight, but once it starts, it can take many months to get back to normal. Fed actions to raise rates have not yet had an obvious impact, but they will. Many think a recession could be just around the corner if it’s not here already.
Looking at the Midterms
President Joe Biden released a statement regarding the CPI data on July 13. He said the numbers don’t reflect what is currently happening because they represent the economy from 30 days ago. He also admitted that inflation is the administration’s “most pressing economic challenge.”
If Biden can’t get the economy under control, Republican strategist Doug Heye believes voters will likely choose Conservatives to run the show in November. The fact is, consumers are hanging on by a financial thread, and the problem is only worsening. Since Democrats are in charge of the White House and both chambers of Congress, the Left might pay the price of American frustration during the midterm elections. Of course, only time will tell.
How do you think the recent inflation numbers will affect the upcoming election cycle?
Copyright 2022, LibertySociety.com
