Prices Soar as Democrats Celebrate ‘Inflation Reduction Act’

The Department of Labor announced consumer prices rose last month, surprising economists. Prices for essentials like housing, groceries and energy continue to increase at alarming rates, forcing families to make painful financial decisions. 

AP: Consumer prices surged 8.3% last month compared with a year earlier, the government said Tuesday, down from an 8.5% increase in July and a four-decade high of 9.1% in June. On a monthly basis, prices rose 0.1%, after a flat reading in July.

But excluding the volatile food and energy categories, so-called core prices jumped 0.6% from July to August — up sharply from 0.3% the previous month and dashing hopes, for now, that core prices would moderate. And in the year ending in August, core prices leapt 6.3%, up from 5.9% in July.

Shortly after the announcement, “thousands of supporters” and elected Democrats are set to celebrate the passage of the so-called Inflation Reduction Act at the White House. But, according to experts, the law — which includes massive tax hikes and doubles the size of the IRS — “may actually worsen inflation.”

New York Times: Mr. Biden will throw a belated celebration to mark his signing of the Inflation Reduction Act at the White House on Tuesday. Mr. Biden is expected to criticize Republicans for voting unanimously against the bill. . .

But the country’s economic reality remains more muddled, as the inflation report underscored. Food prices are continuing to spike, straining lower-income families in particular. A possible railroad strike could disrupt domestic supply chains.

Most importantly — and perhaps most damaging for Mr. Biden and Democrats — Americans’ wages have struggled to keep pace with fast-rising prices, an uncomfortable truth for a president who promised to make real wage gains a centerpiece of his economic program. Inflation-adjusted average hourly earnings ticked up across the economy in August, the Labor Department said Tuesday, but remain down nearly 3 percent from a year ago.

Bottom Line: Democrats are celebrating adding more fuel to the inflation fire as Americans struggle with soaring costs.