The Irrelevance Of The American Inflation Data – OpEd

By White Mountain

Recent inflation data from the United States reveal an overall inflation rate of 3.0%, which is below both the expected 3.1% and the previous 3.3%. This has been received positively by the New York Times and left-leaning media, as it presents President Joe Biden with a narrative of economic improvement ahead of upcoming elections.

Beneath the optimistic headlines lies a stark reality. Nearly every middle-class American feels the continued strain of inflation on their daily lives.

These data are, in fact, misleading, as they only reflect current fluctuations, while the ongoing impact of the COVID-19 pandemic has been continuous. As is widely known, during the pandemic, disruptions in the supply chain led to price increases, job losses, and income reductions. President Biden's strategy at the time involved issuing stimulus checks to mitigate these impacts.

The increased cost caused by the pandemic persists to this day. Automobile prices, fuel costs, food prices, and rent all remain high, maintaining levels seen during the pandemic without decreasing in the post-COVID era. Therefore, the real issue lies in prices remaining elevated while the stimulus from President Biden is no longer in effect. People are now struggling with inflation, yet the inflation data appears "favorable", and this is where the problem lies.

Hence, the inflation data recently released by the U.S. is essentially irrelevant. It is crucial to analyze continuous data over the years of the pandemic to understand that prices continue to hover at elevated levels, contributing to strong stock market performance while American incomes are relatively reducing.

This is a reality that the Federal Reserve and left-leaning media are reluctant to address, despite it being the true state of affairs.