If you ask anyone who has tried to buy a house, a new vehicle, or even a couple bags of groceries over the past several months how it went, they might tell you it was a little pricier than expected.
That's because persistently high inflation, which currently sits at 3.4% for the 12 months ending April 2024, has made just about everything a little more expensive (the long term average, for reference, sits at 3.28%).
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Even on a month to month basis, things cost more now than they did just a month ago. The Consumer Price Index shows that prices in April increased 0.3% from March.
Here's a look at how the price of several major goods and services have changed from March to April:
- Food: increase 0.3%
- Energy: increase 1.1%
- Gasoline: increase 2.8%
- Electricity: decrease 0.1%
- New vehicles: decrease 0.4%
- Used vehicles: decrease 1.4%
- Apparel: increase 1.2%
- Medical care commodities: increase 0.4%
- Shelter: increase 0.4%
- Transportation: increase 0.9%
- Medical care: increase 0.4
"The index for shelter rose in April, as did the index for gasoline. Combined, these two indexes contributed over 70% of the monthly increase in the index for all items," the CPI reports.
Shelter is broadly a measure for the cost of living, as it takes into account both rent or the equivalent of rent, plus the cost of lodging away from home and home insurance.
Key indicators paint a complex picture
But the data can seem conflicting, particularly as several indexes on Wall Street indicate times have never been better – at least for investors.
For the first time ever, the Dow Jones Industrial Average climbed above 40,000 in May, and President Biden was one of the first to hail the record as a critical achievement.
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"This is great news for Americans’ retirement accounts and another sign of confidence in America’s economy," he tweeted. "I’m building an economy from the middle out and bottom up – and our investments are making a difference."
This is great news for Americans’ retirement accounts and another sign of confidence in America’s economy.
— President Biden (@POTUS) May 16, 2024
I’m building an economy from the middle out and bottom up – and our investments are making a difference. https://t.co/rF2PFy1fD3
Donald Trump, for his part, begged to differ. He claimed during a rally in the Bronx that "everyone was better off – we had the greatest economy in history," under his leadership.
"We had gasoline down to $1.87 a gallon," he said. "We had a record low poverty rate for Black Americans and Hispanic Americans...and the real middle class income rose over $6,000 a year."
And a recent analysis by The Wall Street Journal seems to corroborate those claims; a recent May finding indicates that household net worth is up just 0.7% in Biden’s first three years in office, whereas that figure was up to 16% during Trump's first three years (adjusted for inflation).
Former Home Depot CEO worries about inflation
Former Home Depot (HD) CEO Bob Nardelli knows a thing or two about the cost of living and home improvement, and he sounded the alarm on several key numbers in late May.
"The inflation pipeline has a long tail," Nardelli said during an interview with Fox Business. "And I'm seeing it across many, many areas, both with raw materials, you see it with labor."
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"A two bedroom apartment [in downtown Atlanta] now goes for around $3,500 per month, and that's up a couple of thousand dollars from the post-pandemic period. So it's really depressing to see the impact on family net worth and income levels, even though we've seen 40% wage increases in some cases, it's been totally absorbed with inflation and the cost of living," he said, adding, "This is really a devastating impact on the consumer today."
Nardelli added that a "series of debacles and missteps," have had grave impacts on our economy, creating "a tremendous pressure on the fault lines...of our economy, and they're about ready to crack."
The former CEO added that whoever is elected into the presidency in 2024 will have a big task of "correcting the missteps and overspending of this current administration."
"We're in for a rough time, I would say," he said.
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