Has inflation begun to ease back to normal? The Biden-Harris administration wants voters to believe it, arguing that consumer-goods prices appear to have stabilized. Have they?

Today's Producer Price Index shows annualized unadjusted wholesale inflation dipping down to 1.7% in August. That would be welcome news for consumers, but inflation for wholesale consumer foods hit 4.2%. Most of the overall decline came in wholesale energy prices (-8.4%), which consumers will also welcome but may not be all that good of a trade-off from their weekly visit to grocery stores. 

Yesterday's Consumer Price Index offered a mixed bag, too, but not for the middle and working classes. The overall annualized rate dropped from July's 2.9% to 2.5% in August, again mainly because of a dramatic fall in energy prices (-4.0%). The upward spike continued in shelter costs, shooting up 5.2% in August, and included both rentals (5.2%) and owner costs (5.4%). Insurance spiked 3.6%, and municipal utilities went up 4.2%. 

And this, of course, follows on the effects of three years of high overall inflation and its compounding effects, especially on shelter costs. The unnecessary and predictably corrosive mass stimulus in the Joe Biden-Kamala Harris American Rescue Plan of March 2021 -- the key initiative of Bidenomics -- launched that 40-year-high inflation cycle, and it continues to pound consumers to this day. 

Today, the Washington Post picks up on a Census Bureau study that drills down into that impact, albeit with somewhat older data. Shelter inflation has put half or more of the nation's rental households into financial peril in 2023, the Census Bureau found. And hardest hit among those are black and Hispanic families, where the percentage of "cost-burdened" households run well above half:

The cost of rent and utilities in 2023 rose faster than home values for the first time in a decade, the latest sign that a distorted housing market has pushed more people into renting.

That’s one takeaway from the 2023 American Community Survey, released Thursday by the Census Bureau, which also underscored how different peoples’ experience in the housing market can be depending on income and race. From 2011 to 2019, real rent costs rose less than 3 percent every year, the data show. In 2022, after peaking during the coronavirus pandemic, rent grew 1 percent. But last year, rent rose 3.8 percent, compared with a 1.8 percent rise in inflation-adjusted median home values. The findings are yet another example of how a supercharged rental market is squeezing people who also can’t afford to buy. ...

But at the same time, the Census Bureau found that nearly half of the nation’s 42.5 million renter households spent more than 30 percent of their income on housing costs in 2023, a threshold that considers them “cost-burdened.” (Those figures were roughly in line with 2022.)

Among Black renter households, more than 56 percent were cost-burdened, for a total of 4.6 million. Among Hispanic renter households, over 53 percent were cost-burdened, along with nearly 47 percent of White renter households.

This can only have gotten worse in the last eight months. Real earnings over the past year rose only 1.3% over the past year, according to the BLS report yesterday for August. Those are adjusted for inflation, but only at the overall CPI inflation rate, currently at 2.5%. That level of wage growth cannot keep pace with the higher rate of inflation for rent and home ownership, or even inflation in municipal utilities and shelter insurance. 

The data are clear: Workers are falling behind, and they have been falling behind ever since Joe Biden took office. While that erosion hits across the board, minority households are now at greater risk than non-minority households. 

Do you think they know this? Of course they do, which is why inflation remains the top issue in the election. It colors all decisions to be made by voters. And when the Biden-Harris administration insists that they've beaten inflation, at least half of all rental households wonder what world they live in. 

The Post adds at the end that Kamala Harris has a proposal to deal with shelter costs, while tacitly acknowledging that it's really Joe Biden's plan:

Building on moves from the Biden administration, Vice President Kamala Harris, the Democratic presidential nominee, talks about building 3 million more homes if elected, combined with large tax credits to help buyers get into the market.

This is the same demand-spike approach that created the inflationary wave in 2021. The problem in shelter markets is too much demand for too little supply, and that's true in both rentals and home sales. The supply shortage can't be addressed by federal tax incentives; the bottlenecks are local and state restrictions on land use, permitting, and taxes at those levels. The federal government doesn't play any role in these matters, and so the stimulus for more demand will only make matters worse.

You know who the Post could have asked about this proposal? Their own econ analyst, Catherine Rampell:

SANCHEZ: So not a fan of the price gouging ban portion of her proposals. But, Catherine, what about the plan to offer this homeowner subsidy, $25,000, to first time home buyers? Obviously, housing costs have become a concern for many Americans. Would that actually help, or would that drive, as some critics have argued, home prices up? 

RAMPELL: So that piece of her plan, I think, is likely to just drive prices up. We already have really strong demand for housing, the problem is that there isn't enough supply if you just give people even more money to spend on housing. Regardless of who they are, that's probably just going to get passed through to the sellers.

So it sounds nice, particularly for people who maybe don't have a lot of savings, but it's just going to get eaten up at, you know, if you get $25,000 and a tax credit, I think you should expect prices to go up more or less by $25,000.

This is why Harris won't answer questions about policy as the Democrat nominee. She doesn't have answers, except to offer non-sequiturs about how well their current economic policies work while at the same time promising a "new way forward." Meanwhile, voters just hear this ... and despair.

Here's Kamala Harris saying how proud she is of Bidenomics. pic.twitter.com/NJoQAgIxW0

— TruthGateOfficial (@TruthGateOff) September 11, 2024