Americans have lost an average of $4,200 in annual income since Biden took office: Survey shows how gains under Trump have been wiped out — while crippling inflation has sent prices soaring
- Consumer prices have risen 12.7 percent since 2021, well above 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 squeeze Americans on mortgages, car loans and credit cards
- The $4,200 loss erases the $4,000 increase in annual earnings that occurred during the Trump administration
The average American has lost $4,200 in income due to rising inflation and rising interest rates, according to an analysis by the Heritage Foundation.
Experts from the right-wing think tank analyzed consumer price data and Federal Reserve interest rates. Consumer prices have risen 12.7 percent since 2021, far higher than 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 squeeze Americans on mortgages, car loans and credit cards, costing an additional $1,200 a year.
The $4,200 loss erases the $4,000 increase in annual earnings that occurred during the Trump administration, according to Heritage.
“Instead of correcting course more than a year ago when inflation began to rise, the Biden administration and Congress continued the wanton spending spree and the Fed kept the printing presses rolling,” EJ 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 funding costs. Interest rates on all forms of consumer debt are rising.’
The new number represents and increase from the $3,400 loss in revenue for the average American worker that Heritage found in July.
U.S. wage growth has surged to its highest level in years, but most American workers say their wage increases are not keeping pace with the rise in the cost of groceries.
According to Bankrate, 55 percent said their incomes have not kept pace with inflation, as the consumer price index stood at 8.3 percent in August. Just under half of employed Americans say they got raises in the past 12 months.
Only 2 out of 5 workers received a raise or were given. a higher paying job says their income has kept pace or increased faster than their expenses.
August’s inflation rate of 8.3% represented a decline 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 2% target
Grocery prices rose 13.5% from a year ago, the biggest annual increase since 1979, the latest CPI data shows
Grocery costs, rents and mortgage interest have hit Americans the hardest lately.
Food prices are up 13.5 percent over last year, the biggest annual increase since February 1979. Housing costs also continued their upward march, with rents up 6.7 percent in the past 12 months.
Gas prices, while creeping back from above $5 in June, are still up 26 percent over last year.
This week, Federal Reserve Chairman Jerome Powell warned that taming inflation without steep job losses would be ‘very challenging’. The Fed issued another jumbo rate hike to raise interest rates by 75 basis points to their highest level since the 2008 financial crisis as it struggles to bring price increases back to its two percent target.
The US economy has been flashing warning signs for some time, including six straight months of falling GDP in the first half of the year, meeting an informal definition of a recession – but Biden denies a recession has begun.