Heritage Economist: June CPI Numbers Reaffirm the Need to Curb Spending and Restore Fiscal Sanity in Congress

Heritage Economist: June CPI Numbers Reaffirm the Need to Curb Spending and Restore Fiscal Sanity in Congress

Jun 13, 2023 1 min read

WASHINGTON—The Bureau of Labor Statistics today released their latest consumer price index (CPI) figures for the month of May, showing inflation over the last year of 4.0%, while monthly inflation was 0.1%. Core inflation over the last year was 5.3%, over two and a half times the Federal Reserve’s 2% target rate. Since President Biden took office, the CPI has risen 15.5%, an annualized rate of 6.4%. At that pace, prices double in less than 12 years.

Heritage Foundation economist and research fellow EJ Antoni made the following statement in reaction to the monthly CPI figures:

“The middle class continues to suffer under the profligate spending policies of Congress and this administration. Prices have risen dramatically over the last two and a half years, and while the pace of those price increases has slowed, the historically high cost of living is not coming back down. That middle class is still paying the hidden tax of inflation.

Real earnings have plummeted as Americans’ wages have been siphoned into government coffers. Under the Biden administration, weekly earnings adjusted for inflation are down 5.1%, the equivalent for the average family of losing $5,600 in annual income. Inflation has prompted higher interest rates, which raise borrowing costs for Americans, sapping another $1,600 annually from the average family. That means they are effectively $7,200 poorer than when Biden took office.

“Inflation, higher interest rates, and even the banking crisis, are all the consequences of runaway government spending. The debt ceiling negotiations were a missed opportunity to rein in that spending, so far more aggressive actions will be required in the upcoming appropriations process. Yesterday’s monthly statement from the US Treasury showed that without meaningful change soon, the federal budget and US economy will enter a death spiral, where interest payments on the federal debt alone will bankrupt the country, and American families will have to pay.”
 

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