The recent inflation data for June released by the United States shows an overall inflation rate dropping to 3.0%, lower than the expected 3.1% and the previous 3.3%. Most of the Democratic Party-aligned media in the U.S. reacted to this with excitement, greatly encouraged by the economic "achievements" attributed to the Democratic Party and "Bidenomics".
The New York Times, known to be the mouthpiece of progressive intellectuals, promptly published an article on its front page asserting that the further cooling of inflation in June is good news for both the Federal Reserve and consumers. The article also noted, "Consumer Price Index inflation was 3 percent yearly in June and fell month-to-month, a sharper slowdown than expected and a relief for the White House”. Federal Reserve chair Jerome Powell, upon receiving the data, delivered a more tempered speech, stating to the Senate Banking Committee on the following Tuesday in Washington, that "inflation has eased notably” in the past two years, adding that “and more good data would strengthen our confidence that inflation is moving sustainably toward 2%”.
Inflation has always been a focal point of concern for the American public, with prices being a matter of universal interest. Consequently, the comments from influencers, who often lack a comprehensive understanding of the matter, immediately exploded with optimism, permeating various media outlets. This included the viewpoints of many renowned economists. Nobel laureate economist Paul Krugman, who has a long-standing column in the New York Times, titled his commentary on the inflation data release "A Beautiful Inflation Report". Like many American intellectuals, he is a staunch supporter of the Democratic Party, hence his applause and praise for Biden are unsurprising.
In contrast to this, there were reactions from ordinary citizens.
An American blue-collar worker shared his plight on a TV program. Before the pandemic, he earned USD 300 a day, enough to provide for himself and his children, allowing them to lead a decent life. This income was typical for many hardworking blue-collar workers in the U.S., who put in long hours from morning till night. Despite working the same hours and earning the same amount after the pandemic, it is no longer sufficient to support his family.
American credit card debt too has reached a new high of USD 1.27 trillion, and one-third of American adults have to take on a second part-time job to increase their household income. These situations reveal the dark reality of Bidenomics.
It is obvious that there is a stark disconnect between Wall Street analysts, economists, academics, as well as media columnists, with the actual living experiences of ordinary people
As it stands, the current inflation data in the U.S. is simply unreliable. The base effect of the data obscures the deeper significance beneath the surface. The New York Times and left-wing media are celebrating because it means President Biden now has a reason to claim “economic improvement" in the upcoming election. The so-called "progressives", intellectuals from American universities, almost all fans of Biden and the Democratic Party, oppose Donald Trump and are delighted with every achievement of the Democrats and Biden. Thus, they have failed to see the reality.
While newspapers and media headlines are optimistic, the actual situation is far from being so. Nearly every middle-class American can feel that inflation is putting pressure on their lives. The reason of this discrepancy is clear: the analysts, academics, and columnists lack a timeline-based understanding of inflation data; they only interpret the data as taught by economic theory, superficially and systematically.
The problem lies in the fact that these data cannot be viewed this way now; they only reflect current changes. The impact brought by the COVID-19 pandemic has been continuous. Specifically, the current period is at the peak of an abnormal short-term cycle of nearly five years. It is well known that during the COVID-19 pandemic, global supply chain disruptions caused prices to soar sharply, and job positions drastically decreased, forcing people to endure reduced household incomes. During the pandemic, President Biden adopted stimulus to reduce and offset the impact and influence of these price increases.
Prices can easily rise, but reducing them, especially for mass consumer goods, proves challenging. Currently, the inflationary effects of the COVID-19 pandemic persist, with few businesses willing to lower prices voluntarily post-pandemic. Take car prices, for instance. They remain stubbornly high, reflecting levels seen during the peak of the pandemic. The same trend applies to fuel, food, rent, and various service charges, all continue to hover above pre-pandemic levels without showing signs of reverting. Consequently, while commodity prices remain elevated in the post-pandemic era, the absence of President Biden's stimulus exacerbates the strain on people coping with inflation. Hence, despite inflation becoming unbearable for many, data shows a picture divorced from reality.
Whether it is month-on-month or year-on-year data, unless new structured calculations are done, one cannot fully grasp the picture of this short-term pandemic cycle. Indeed, one should also extend the analysis to a longer timeframe and carefully observe beyond the abnormal short-term fluctuations. Through this, we will find that prices are still lingering at high levels. High prices theoretically lead to better stock performance due to higher profits, but American incomes are relatively decreasing, making household life increasingly difficult. This also explains why the U.S. stock market is performing well while people are struggling in their daily lives.
Behind these data, the hidden truth under the table is evidently something the Fed and the left-wing media in the U.S. are unwilling to address. Yet, this represents the true reality of the American economy today. It is likely a key reason threatening President Biden's reelection campaign. The American people are not naïve; they will base their voting decisions on their own firsthand experiences. The hype from influencers' fans ultimately only serves to benefit the news industry and does not really change anything.
