As Joe Biden himself would put it: Come on, man. That’s malarkey. Granted, if I ran the White House press shop and I didn’t care about math or intellectual honesty, I’d spin today’s CPI report exactly this way.
Clearly, that’s the basis for White House claims, starting with Joe Biden himself, who claimed we saw “zero percent inflation” last month:
— 合约狗🐕 (@HYG2220) August 10, 2022
Ahem. We did not achieve “zero percent inflation” in July. Year-on-year CPI inflation in July remained at a near-40-year high of 8.5%, and core CPI was almost unchanged from last month at 5.9%. Even the month-on-month reading isn’t a “zero percent” in reality, but a lack of change in either direction from the previous month’s inflation — which was 1.3% over May. It’s a stall in the rise, not a no-inflation result, and only because of a sharp drop in gasoline prices that appears connected to a sharp drop in demand for fuel … which isn’t a trend that administrations would normally brag about.
The CPI report makes clear that inflation apart from gasoline is anything but “zero,” especially at the grocery store. Even the month-on-month figures for food are still sky high:
The food index increased 1.1 percent in July; this was the seventh consecutive monthly increase of 0.9 percent or more. The food at home index rose 1.3 percent in July as all six major grocery store food group indexes increased. The index for nonalcoholic beverages rose the most, increasing 2.3 percent as the index for coffee rose 3.5 percent. The index for other food at home rose 1.8 percent, as did the index for cereals and bakery products. The index for dairy and related products increased 1.7 percent over the month. The index for meats, poultry, fish, and eggs rose 0.5 percent in July after declining in June. The index for fruits and vegetables also increased 0.5 percent over the month.
The food away from home index rose 0.7 percent in July after rising 0.9 percent in June. The index for limited service meals increased 0.8 percent and the index for full service meals increased 0.6 percent over the month.
The food at home index rose 13.1 percent over the last 12 months, the largest 12-month increase since the period ending March 1979. The index for other food at home rose 15.8 percent and the index for cereals and bakery products increased 15.0 percent over the year. The remaining major grocery store food groups posted increases ranging from 9.3 percent (fruits and vegetables) to 14.9 percent (dairy and related products).
The index for food away from home rose 7.6 percent over the last year. The index for full service meals rose 8.9 percent over the last 12 months, and the index for limited service meals rose 7.2 percent over the last year.
Heritage Foundation economist Joel Griffith breaks this down a bit more:
“Transitory” inflation over the past year:
— Joel Griffith (@joelgriffith) August 10, 2022
The only accurate “zero” that Biden can claim is on his own honesty. Biden’s chief of staff Ron Klain followed up on Twitter with an equally specious claim, although Klain avoided the false “zero percent” claim:
Jobs up and inflation down. Wages up and gas prices down. https://t.co/GtMn2X6NHW
— Ronald Klain (@WHCOS) August 10, 2022
Inflation isn’t “down.” It’s still going up, which is how inflation works. The rate of inflation slowed a bit, but inflation is still going up — and substantially so even on a month-to-month basis outside of the drop in gas prices, as noted above. Wages may be nominally up, but inflation has wiped out wage gains for well over a year now. The BEA’s Q2 report shows that real disposable personal income has declined for five straight quarters, which means that buying power is significantly down — especially since that also is a comparative, compounding measure. Other than the one quarter in which Biden’s massive stimulus combined up with the leftover previous stimulus, workers have lost buying power throughout Biden’s presidency:
The last reading on that was -0.5%, but even that sounds more optimistic than it really is. That’s -0.5% in Q2 as compared to Q1, which was -7.8% as compared to 2021Q4, and so on. That makes those losses cumulative, just as inflation is cumulative and compounding over time. To get back to the actual buying power Americans had after Biden’s stimulus sugar-high, we’d need to see massive increases in real disposable personal income, not just one result that crosses back north of the 0% axis.
Again, this kind of spin is as predictable as it is soulless and dishonest. It’s not as if Biden and Klain would go out and say, “Man, this economy stinks and inflation is killing us,” because to say that would require Biden and Klain to change policies and find production incentives that actually work. This spin makes it clear that they have no intention of changing policy, so instead they’re going to tell inflation-strapped Americans that their evaporated buying power is just a figment of their imagination. That’s precisely what this spin says — and why it’s likely to fall as flat as all of Biden’s other dodges for the past 15 months on inflation.