If happy talk from the White House prevented recessions, the economy would be booming.
Instead, the bad economic news never seems to end. On Friday, the consumer price index showed inflation hit 8.6 percent in May. That’s the highest rate since 1981.
It doesn’t seem likely to improve anytime soon. Gasoline recently hit $5 a gallon nationwide, according to Gas Buddy. In Nevada, of course, the average price is around 60 cents higher than that. Gasoline running $6 a gallon no longer seems like a far-off nightmare, but an inevitable reality.
It’s not just gasoline and food, though. The core inflation rate, which excludes those items, was up 0.6 percentage points last month. On an annual basis, that works out to 7.2 percent.
So much for inflation being a passing phenomenon. Even Treasury Secretary Janet Yellen is finally admitting that she was “wrong” last year to dismiss inflation as “transitory.” The Federal Reserve expects to slowly keep raising interest rates, but that looks unlikely to tame inflation in the near term.
Little wonder that Americans have soured on the economy. A recent Wall Street Journal-NORC poll found 83 percent of respondents believed the economy was in poor or not-so-good shape.
A University of Michigan survey found consumer sentiment hit a record low in June. The stock market continued its downward slide. The S&P 500 is down around 18 percent since the start of the year.
The U.S. economy shrank by 1.5 percent in the first quarter. The Federal Reserve Bank of Atlanta’s GDPNow tracker estimates economic growth in the second quarter to be an anemic 0.9 percent. This means the U.S. economy sits on the brink of a recession. A CNBC survey of CFOs found each one believes a recession is inevitable.
But members of the Biden administration and other partisans have tried mightily to put a shine on the clunker they created. Last Monday, the White House sent out a fact sheet titled “Biden economic plan delivers robust progress in all 50 states.” A news release last week from Nevada Democratic Victory breathlessly proclaimed that “Biden’s economic plan is working for Nevadans.”
The president is also eager to get in on the ruse. “We’ve laid an economic foundation that’s historically strong,” Mr. Biden said this month, “and now we’re moving forward to a new moment where we can build on that foundation, build a future of stable, steady growth so we can bring down inflation without sacrificing all the historic gains we’ve made.”
Yes, and if ifs and buts were candy and nuts, it’d be Christmas every day. The American public, however, is under no such delusions.