June 23, 2022

Inflation Surge Rocks U.S. Consumer Prices

It is no secret that the U.S. economy has been struggling in recent years, but it may come as a surprise to some Americans how low their wages have actually fallen when inflation is taken into account. The Bureau of Labor Statistics announced on Tuesday that U.S. consumer prices jumped 6.2% in October, the biggest inflation surge in more than 30 years and much higher than expected by economists polled by Reuters who were forecasting only a 4% rise for the month.This increase was led primarily by increases in energy costs-gasoline prices increased 11%, natural gas prices rose 19%, and fuel oil went up 14%. Prices for food also increased 2% from September to October-largely due to an 8.7% rise in food prices at restaurants.

The average American household’s income is actually lower today than it was during the 1990s after adjusting for inflation, according to a report by Sentier Research cited on CNN Money . While most Americans know that their wages have been stagnant for years, this new data highlights just how much prices have increased in recent years and how desperate Americans really are for a raise.

Data from the 1990s showed that median income levels, adjusted for inflation, were at their highest point in 1997 with $56,080 per household and then steadily declined over the next decade. According to the most recent data available from Sentier Research, median household income fell 1.8% in 2010 to $50,221 and was down 4.4% from its previous peak of $52,uits.

<br> Although we have seen some recovery since the official end of the recession in mid-2009, real median annual household income today is still about 2% below the December 2007 level and 7% below the January 2000 level, said Gordon Green, president of Sentier Research. It will take several years to regain all that ground lost during and after the recession.

The inflation data also showed that Americans are spending a much higher portion of their income on necessities such as food. On average, Americans spent 17.5% of their annual income on food in 1990 but more than doubled that figure to 37.7% today.

According to the Bureau of Labor Statistics , annual inflation rates are currently at 3%. If this continues, it means that the average American household will need an extra $2,195 in order to purchase the same amount of goods and services that they bought last year.

The Huffington Post also reported on Wednesday that many Americans are opting out of health insurance altogether due to rising costs. A new study by Families USA found that 8 million uninsured adults under age 65 would qualify for Medicaid or subsidized private insurance if their state expanded their Medicaid program and the federal government took up the expansion.

Eight million people is a lot of people, but it’s only about one-quarter of the people who will be uninsured next year, said Ron Pollack, executive director of Families USA. The public debate between now and 2014 will likely focus on those who are left out. They will be at the center of this debate.

The major difference between those who would qualify for Medicaid and those who would not is income level. Families USA found that 4 million adults with incomes under 133% of the federal poverty line do not have health insurance from their employers or a government program and will not be able to afford coverage unless their state expands Medicaid.

In a recent editorial for the Huffington Post, Sen. Bernie Sanders wrote that Americans are fed up with doubling and tripling health care costs while we hear stories of orphans turned away from treatment because they have no insurance.With good reason, he said.

The solution to this problem isn’t difficult to understand, Sanders wrote. If every child in America is insured the same way that our veterans are insured, or that members of Congress are insured, or that I am insured for my Social Security, it would be a very different story.