San José, CA – The Consumer Price Index rose to a three-year high, where prices of consumer goods and services were 4.2% higher than a year ago. According to the Bureau of Labor Statistics (BLS), the inflation rate has risen for three months in a row, after the start of the U.S.-Israeli war on Iran. From a pre-war rate of 2.4%, consumer prices have risen ever higher, led by higher costs for gasoline.
Average prices for the working class have risen even faster, up 4.4% from a year earlier. This means that real wages, or the purchasing power of wages for U.S. workers, have fallen for the second month in a row, and are now 0.8% less than a year ago. This was enough to bring the average worker back to their purchasing power in January 2025, right before Trump took office for his second term.
Trump keeps repeating how great the economy is, which is true for him and his billionaire buddies, who own most of U.S. stocks, with the S&P 500, a broad measure of the stock market, up 22% since Trump took office.
Unfortunately for working people, more price increases are on the horizon. Prices of key commodities used in production, such as diesel fuel, fertilizer and helium, have also spiked, as much of their production was shipped through the strait of Hormuz. This will lead to higher prices for goods that are moved, food, and semiconductors. A measure of these so-called “intermediate goods,” goods that are manufactured but used to make other goods, or not sold to consumers, was up 6% year over year in April, again foretelling higher inflation to come.
In another sign of economic distress, America’s Car-Mart, Inc., a seller of used cars and lender to car buyers with limited incomes and/or poorer credit, said that it was looking for an emergency loan. The company is also preparing for a bankruptcy filing. This is just another sign that workers have been forced to buy used cars as new car prices march ever higher.
Stocks fell across the board, with the broad S&P 500 falling more than 1.5%, while the technology-heavy NASDAQ sank almost 2%. The drop in stock prices was also fed by news of renewed military clashes in the U.S.-Israeli war on Iran, which boosted oil prices.
#SanJoseCA #CA #CapitalismAndEconomy #Inflation
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