Americans lost an average of $4,000 in wages

by NewsTimeOffice

Americans have lost an average of $4,200 in annual income since Biden took office: Study reveals how gains have been erased under Trump — while crippling inflation pushes up prices

With consumer prices rising 12.7 percent through 2021, experts at the Heritage Foundation believe it will cost Americans nearly $3,000 in purchasing power, as the Fed pushes interest rates to between 3-3.25 percent, weighing on Americans higher borrowing costs, vehicle loans and credit cards. The $4,200 loss erases a $4,000 increase in annual income under the Trump administration

According to an analysis by the Heritage Foundation, the average American lost $4,200 in income due to rising inflation and rising interest rates.

Experts at right-leaning think tanks analyzed consumer price data and Federal Reserve interest rates. Consumer prices are set to rise 12.7 percent through 2021, outpacing wages and heritage experts believe cost Americans nearly $3,000 in purchasing power.

As the Fed pushes interest rates to between 3-3.25 percent, higher borrowing costs are weighing on Americans’ mortgages, vehicle loans and credit cards, costing them another $1,200 per year.

The $4,200 loss erased a $4,000 increase in annual income under the Trump administration, according to Heritage.

“When inflation started to rise a year ago, instead of correcting course, the Biden administration and Congress continued the trend of irrational spending and the Fed let the printing presses roll,” EJ Antony, who found the data, said in a statement. ‘Many Americans have taken on additional debt to cope with the high cost of living. Now, the Fed is finally fighting inflation, which is raising interest rates and raising financing costs. All types of consumer credit rates are rising.’

The new figures represent and increase from the $3,400 loss in revenue for the average American worker that Heritage reported in July.

U.S. wage growth has risen to its highest level in years, but most American workers say their pay increases have not kept pace with rising prices for everyday goods.

Fifty-five percent said their incomes haven’t kept up with inflation, as the consumer price index sat at 8.3 percent through August, according to Bankrate. Just under half of employed Americans say they were given a raise in the past 12 months.

Only 2 in 5 workers received or received a pay raise. A high-paying job means that their income has kept pace or increased compared to their expenses.

August’s 8.3% inflation rate represents a drop from 40-year highs of 9.1% in June and 8.5% in July — but shows that inflation is still running hot and above the Fed’s target of 2%.

Grocery prices rose 13.5% from a year ago, the biggest annual increase since 1979, the latest CPI data showed.

Grocery costs, rents and mortgage rates have hit Americans the hardest of late.

Food prices rose 13.5 percent over the past year, the largest annual increase since February 1979. Housing costs also continued their upward march, with rents rising 6.7 percent over the past 12 months.

Gas prices, although they dropped from $5 in June, are still 26 percent higher than last year.

This week Federal Reserve Chairman Jerome Powell warned that controlling inflation without steep job losses would be ‘very challenging’. The Fed issued another jumbo interest rate hike to raise rates by 75 basis points to their highest level since the 2008 financial crisis as it struggles to keep its price growth target down to two percent.

The US economy has been showing warning signs for some time, including six months of shrinking GDP in the first half of the year, meeting an unofficial definition of a recession – but Biden has denied that a recession has begun.

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