Recent data on the inflation rate, GDP growth, and jobs from the U.S. Bureau of Labor Statistics have given the Biden administration reason to brag about the economy. One ardently hopes this is purely political grandstanding rather than a real assessment of where things stand. If not, it means the administration doesn’t understand the true state of the American economy–and, more importantly, the fact that it’s been declining now for decades and urgently needs to be overhauled.
To begin with, the Consumer Price Index figure showing the year-over-year inflation rate declining to 3% was greatly influenced by a 16% drop in energy prices. A more realistic picture of inflation, the so-called “trimmed-mean CPI,” which removes high and low outliers, like the energy price drop, shows inflation still running at 5%. This is on top of the 4.7% increase that hit U.S. consumers in 2021 and the 8% price spike in 2022.
