Gas prices have hit American wallets hard, causing a surge in inflation rates and proving that the road to lower prices is a bumpy one. In August, the personal consumption expenditure price index, which the Federal Reserve relies on to track inflation, jumped by a whopping 0.4 percent, twice the increase seen in the previous month. It’s no surprise that economists saw this coming, but it certainly doesn’t make it any easier for Americans struggling to make ends meet.
Comparing prices from a year ago, the PCE price index has jumped 3.5 percent, an increase from the 3.3 percent in July. The culprits? None other than the rising energy costs. While core prices, which exclude food and energy, only crept up 0.1 percent in August, year-over-year they have risen by a staggering 3.9 percent. That’s higher than the headline number, proving once again that the cost of living is outpacing expectations.
Some policymakers argue that core inflation is a better measure of the underlying trend and future projections. However, critics warn against placing too much emphasis on it as it fails to account for the impact of rising food and energy prices on everyday households. Fed Chairman Jerome Powell may claim to be keeping an eye on both headline and core inflation, but it’s clear that the everyday American is the one feeling the pinch the most.
To make matters worse, the rise in oil prices shows no signs of slowing down. With the U.S. strategic petroleum reserves already depleted and no immediate solution in sight, prices at the pump are likely to stay high. To add insult to injury, the Biden administration’s relentless attack on the oil, gas, and coal industries has left investors wary of dedicating capital to fossil fuel extraction or refinement. Looks like we’re stuck between a rock and a hard place.
On a more positive note, consumer spending did manage to increase by 0.4 percent in August, according to data from the Commerce Department. This suggests that Americans are rearranging their budgets to accommodate the higher gasoline prices, but at what cost? Are we sacrificing other goods and services just to afford a drive to work? It seems like Americans are being forced to make tough choices, all thanks to rising gas prices and an inflation rate that shows no mercy.
In conclusion, the Bidenflation crisis is hitting Americans hard in the gas tank and the wallet. With no relief in sight and the Biden administration’s hostility towards the energy industry, it’s clear that everyday Americans will continue to bear the burden of these skyrocketing prices. It’s time for our leaders to focus on policies that actually benefit the American people, rather than hindering their ability to put food on the table and gas in their cars.