The November 31-year-high inflation caused workers to lose their wages.
In recent months, hourly salaries have skyrocketed due to an unusually tight labor market. This has enabled workers to demand higher wages from companies desperate to fill open positions.
Problem is? When you consider the highest inflation rate in almost four decades, the big pay rise was nothing but a mirage.
Friday’s Labor Department report showed that the average hourly earnings of all employees decreased by 0.4% between October and November, when you consider rising consumer prices. The average hourly earnings rose 0.3% in November but this was accompanied by a 0.8% increase in inflation.
The average hourly earnings plunged 1.9% from the previous year to November on an annual basis.
This means that the average American worker is worse off than they were one year ago. However, nominal wages are increasing at an unprecedented rate. This is because inflation is increasing: Friday’s government report showed that the consumer price index rose 6.8% in November compared to a year ago. This was the fastest increase since June 1982 when inflation reached 7.1%.
CPI, which measures a variety of goods including gasoline, health care, groceries, and rents, increased 0.8% in the month to October.
According to Friday’s Labor Department report, the consumer price index rose 6.8% from a year earlier. This is the fastest increase since June 1982 when inflation reached 7.1%. CPI, which measures a variety of goods including gasoline, health care, groceries, and rents, increased 0.8% in the month ended October.
Price increases were widespread: Energy prices jumped 3.5% in November and are up 33.3% year over year. Gasoline is a stunning 58.1% higher than it was a year ago. Food prices have also climbed 6.1% higher over the year, while used car and truck prices – a major component of the inflation increase – are up 31%.
The price rises had reduced Americans’ wages, which is bad news for President Biden who has seen his approval ratings plummet as inflation rose. While the White House blames the rises on supply-chain bottlenecks, and other -induced disruptions to the economy, Republicans attribute it to the president’s huge spending plan.
Biden stated to reporters Friday that he expected the fastest inflation to slow down in the coming months.
He said, “It’s at the peak of crisis.” “I believe you’ll see it changing sooner than, faster than, and more quickly than it will take – than most people think.”
