Americans have lost an average of $4,000 in salary and have wiped out any gains made under Trump, report states
- Consumer prices have risen 12.7 percent since 2021, far outpacing wages
- Experts at the Heritage Foundation believe this has cost Americans about $3,000 each in purchasing power
- As the Fed pushes interest rates to a range of 3-3.25 percent, higher borrowing costs are squeezing Americans on mortgages, vehicle loans and credit cards
- The $4,200 loss erases the $4,000 increase in annual earnings that occurred under the Trump administration
The average American has lost $4,200 in income due to soaring inflation and rising interest rates, according to an analysis by the Heritage Foundation.
Experts at the right-leaning think tank analyzed consumer prices data and the Federal Reserve‘s interest rates. Consumer prices have risen 12.7 percent since 2021, far outpacing wages and Heritage experts believe this has cost Americans about $3,000 each in purchasing power.
As the Fed pushes interest rates to a range of 3-3.25 percent, higher borrowing costs are squeezing Americans on mortgages, vehicle loans and credit cards, costing another $1,200 per year.
The $4,200 loss erases the $4,000 increase in annual earnings that occurred under the Trump administration, according to Heritage.
‘Instead of correcting course over a year ago when inflation began rising, the Biden administration and Congress continued the profligate spending spree and the Fed let the printing presses roll,’ E.J. Antoni, who found the data, said in a statement. ‘Many Americans have taken on additional debt to cope with higher living costs. Now, the Fed is finally fighting inflation, which is pushing up interest rates and increasing financing costs. Rates on all kinds of consumer debt are rising.’
The new figure represents and increase from the $3,400 loss in revenue for the Average American worker that Heritage found in July.
Wage growth in the U.S. has risen to its highest in years, but most American workers say their pay increases are not keeping pace with the rise in costs of everyday goods.
According to Bankrate 55 percent said their incomes have not kept pace with inflation, as the consumer price index sits at 8.3 percent as of August. Just under half of employed Americans say they have been given pay increases in the last 12 months.
Just 2 in 5 workers who received a pay raise or got. a higher paying job say their income has kept pace or risen faster than their expenses.
August’s inflation rate of 8.3% represented a drop from a 40-year high of 9.1% in June and 8.5% in July — but showed that inflation is still running hot and well above the Fed’s target rate of 2%
Grocery prices are up 13.5% from a year ago, the largest annual increase since 1979, the latest CPI data show
Grocery costs, rents and and mortgage rates have hit Americans the hardest as of late.
Food prices are up 13.5 percent from last year, the biggest annual increase seen since February 1979. Housing costs also continued their upward march, with rent up 6.7 percent in the past 12 months.
Gas prices, though they’ve crept back down from over $5 in June, are still up 26 percent over last year.
This week Federal Reserve chair Jerome Powell warned it would be ‘very challenging’ to tame inflation without steep job losses. 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 wrestles to get price rises back down to its target two percent.
The US economy has been flashing warning signs for some time, including six straight months of shrinking GDP in the first half of the year, meeting one informal definition of a recession — but Biden denies a recession has begun.