A few days ago, I had a doctor appointment that was several miles away. I was driving a busy street and came upon a huge traffic jam. Just one lane, but quite the backup.
As I was able to get past it, I finally figured out what it was. The people were in a line waiting for free food. Bags of groceries. Right then, I knew, people are still hurting. Lots of people.
Recession or not, we are in trouble.
When the Consumer Price Index Report for August came out yesterday, the stock market tanked. Prices rose 8.3% from a year earlier.
The surprise here is that despite the Federal Reserve raising interest rates, inflation is still stubbornly high. Yes, gas prices have come down, but nothing else has.
Rent. Restaurants. Medical care. Groceries. All of it, still too expensive.
Groceries, by the way, up 13-and-a-half percent over last year. Eggs up almost 40%. Flour, 23%. Milk, 17%. Bread, 16%.
The markets took a huge hit. The Dow lost 1200 points. The biggest one day loss in two years. The Nasdaq and S&P had steep losses too.
All the financial reports caused it “surprising.” I could only think about all those people lined up for groceries. No surprise to them. Everything costs too much.
This all happened on the same day that President Biden held a celebration at the White House touting the success of his administration’s fight against inflation. Not the best timing.
Another concern here, the potential for a national rail strike. From CNN… about 60,000 union members who work for the nation’s freight railroads, including engineers and conductors, are set to go on strike Friday.
Should this happen, the nation’s already fragile supply chain problem will only get worse. The White House is sending the Labor Secretary to sit in on talks between the union and rail companies.
What will the Federal Reserve do now? A rate increase is a real possibility. 3/4 of a point. Some speculate a full point.
Everything seems to be going up. Except our incomes. According to the Census Bureau, when adjusted for inflation, household income is down about $600 from a year ago.
The news headlines yesterday talked about inflation and the stock market. Those people in line for food already already knew that. Days ago.