Amid the latest Consumer Price Index (CPI) data releases this week showing a 0.2% increase in June's inflation, with a 3% increase over the past year, wages are slipping and fueling concerns among analysts and Heritage Foundation economist EJ Antoni is urging policymakers to act urgently on government overspending.
The CPI data also indicated the leading drivers to the increase in inflation were motor vehicle insurance and shelter, with the energy index up 0.6% for the month amid mixed major energy component indexes, according to U.S. Bureau of Labor Statistics data.
“American families are being forced to eat the rotten fruit from the tree of government overspending, and that will continue until Congress and the White House rein in their bloated budgetary habits,” Antoni said in a July 12 Heritage Foundation release.
Amid the slowing of inflation, Antoni noted there is still some concern over a lack of growth in wages, and BLS data may support his worries, according to the release.
“In 26 of the last 30 months, annual inflation has outpaced wage growth, and real weekly earnings are down 4.6% over that same time," Antoni said in the Heritage Foundation release.
The continued increase in the inflation rate remains at odds with the Federal Reserve’s target of 2%, while Antoni noted inflation has trended upward at an annualized rate of about 3%, while it increased at just 1.8% from 2009 to 2021, according to the release.
Antoni noted the increase in the rate of inflation could be connected to “government spending, borrowing and printing of money today is so much greater than in the past, inflation is about 50% higher,” the release reported.
Moreover, tying a connection to the struggles faced by American families amid ballooning government spending, Antoni said those families are forced to shoulder the burden, the release said.
“American families are being forced to eat the rotten fruit from the tree of government overspending, and that will continue until Congress and the White House rein in their bloated budgetary habits,” Antoni said in the release.
Antoni also pressed key opinion leaders to focus on the need to set a stable financial course for the country, including the federal budget, and he noted that while trends would indicate a looming recession, it is vital to move to head off potential issues, according to the release.
“It is imperative that we get our financial house in order, and the federal budget is no exception to that mandate," he said in the release, spotlighting the need for responsible fiscal management and proactive steps to ensure fiscal stability.
