Tag: inflation

California Fast Food Prices Skyrocket Following Imposition of $20 Minimum Wage

The price of fast food restaurants in California has surged after the state imposed a $20 minimum wage law.

According to an analysis from Kalinowski Equity Research, fast-food restaurants across the Golden State have hiked prices by around eight percent since the law went into effect at the beginning of this month.

The New York Post reports:

Wendy’s raised its menu prices by around 8% while Chipotle Mexican Grill hiked its prices by approximately 7.5%. Starbucks, the Seattle-based coffee chain, raised the prices of its menu items at its California locations by around 7%, while Taco Bell hiked its prices 3%, the report found.

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It found that Burger King instituted an average price increase of 1.4% for its Whopper Meal and 2.1% for its BK Royal Crispy Chicken Meal at the 25 locations. The report’s authors did the same for Chipotle, which was found to have boosted the price of its Chicken Burrito by 8.3% and its Steak Burrito by 7% at 25 locations in California between Feb. 7 and April 2.

Wendy’s also instituted substantial price hikes on staple menu items such as Dave’s Combo and the Classic Chicken Sandwich Combo. In a comparison of prices from Feb. 12 and April 2 at 25 Wendy’s stores in California, the company raised the price of both items by an average of 8%. McDonald’s appears to be the only fast food chain that has largely held off on raising its menu item prices, according to the report.

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Kilo-WHAT?-hours: Electricity prices soar by nearly 30% under the Biden administration

Prices of electricity have been hunting budget-sensitive households since President Joe Biden assumed the presidency. Families have experienced an astronomical rise in the costs, well outpacing inflation with a 29.4 percent jump in price from 2021. The prices are now almost double that of inflation and skyrocketed thirteen times faster than they had in the seven years before 2021.

The data showed that the energy index rose by 1.1 percent in March following a 2.3 percent increase in February. Despite the Federal Reserve holding interest rates steady since July 2023, inflation continues to pose a problem for policymakers and households.

“There is no improvement here, we’re moving in the wrong direction,” said Bankrate Chief Financial Analyst Greg McBride in an interview with Fox Business. “The usual trouble spots persist, like shelter, motor vehicle insurance, maintenance, repairs and service costs. Add electricity to that list, up 0.9 percent in March and five percent over the past year.”

Part of the reason for the surge in energy prices is due to the push to replace fossil fuels and nuclear power plants with renewable subsidies and green-energy mandates.

Gasoline prices also continue to hit American pocketbooks hard. Though prices have fallen off their peak from 2022, the cost of gasoline remains 52.1 percent higher than it was when Biden first took office. The gasoline and electricity index also increased in March, climbing 1.7 percent and 0.9 percent, respectively.

The Biden government has depleted much of the Strategic Petroleum Reserve in an effort to bring down gasoline costs. However, the relief has only been temporary, with prices again starting to rise across the country. Moreover, the Bureau of Labor Statistics (BLS) reported that the energy index jumped 2.1 percent.

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The U.S. national debt is rising by $1 trillion about every 100 days

The debt load of the U.S. is growing at a quicker clip in recent months, increasing about $1 trillion nearly every 100 days.

The nation’s debt permanently crossed over to $34 trillion on Jan. 4, after briefly crossing the mark on Dec. 29, according to data from the U.S. Department of the Treasury. It reached $33 trillion on Sept. 15, 2023, and $32 trillion on June 15, 2023, hitting this accelerated pace. Before that, the $1 trillion move higher from $31 trillion took about eight months.

U.S. debt, which is the amount of money the federal government borrows to cover operating expenses, now stands at nearly $34.4 billion, as of Wednesday. Bank of America investment strategist Michael Hartnett believes the 100-day pattern will remain intact with the move from $34 trillion to $35 trillion.

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The Average U.S. Household Is Spending $1,019 More A Month Just To Buy The Same Goods And Services It Did 3 Years Ago

It seems odd to talk about 2021 as “the good old days”, but the truth is that the cost of living was far lower just three short years ago.  Earlier today, I did an interview with Sam Rohrer of Stand In The Gap Today in which we discussed how food prices have gotten wildly out of control.  One example that I brought up was the fact that a Big Mac “value meal” can cost up to 18 dollars in some parts of the country.  There is no way that I would shell out 18 bucks for a burger, some fries and a drink at McDonald’s.  But this is the economic environment that we live in today.

Has your income gone up by more than a thousand dollars a month over the past three years?

If not, you are falling behind.

According to economist Mark Zandi, the average U.S. household is now shelling out an additional $1,019 a month just to purchase the exact same goods and services that it did three years ago…

The typical U.S. household needed to pay $213 more a month in January to purchase the same goods and services it did one year ago because of still-high inflation, according to new calculations from Moody’s Analytics chief economist Mark Zandi.

Americans are paying on average $605 more each month compared with the same time two years ago and $1,019 more compared with three years ago, before the inflation crisis began.

In the old days, I actually enjoyed going to the grocery store.

But now it has become such a painful experience.

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The Sindex: Cigarette Prices Outpacing Inflation

Inflation stressing you out? Making you wish you had just a touch of nicotine in your system? Unfortunately, that’ll cost a lot. While prices economywide have risen 3.1 percent in the last year, cigarette prices have jumped 8 percent. On top of federal and state taxes that often make up half the price of a pack, tobacco companies tend to raise their prices faster than inflation to make up for declining sales volume. These and the rest of the numbers in the Reason Sindex use data from November 2023.

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Biden’s Bizarre ‘Shrinkflation’ Nonsense

When President Joe Biden was running for office in 2020, he explicitly promised that putting him in the White House would mean that “you’ll actually see your standard of living go up and your costs go down.”

That, uh, hasn’t happened.

We don’t need to relitigate the entire economic history of the Biden administration in this space, but here’s a quick recap: Inflation surged to a 40-year high, peaking above 9 percent in June 2022. Prices are now rising less quickly, but inflation remains well above the Federal Reserve’s target rate of 2 percent. (It was 3.4 percent for the 12 months ending in December. We’ll get January’s numbers on Tuesday morning.) Biden’s policies—specifically, the $2 trillion spending package he signed in March 2021—certainly contributed to that inflationary spiral. Economists will continue to debate how much of a factor it was, but voters tend to operate on a more facile level of rewarding presidents for good economic times and punishing them for bad economic times. And rightly or only semi-rightly, Biden’s name is attached to this bout with inflation.

You might expect the president, now that he’s in the middle of a re-election campaign, to try to avoid anything to do with that topic. Don’t remind voters of how rough the past few years have been, focus on the future, talk about the positive signals coming from the economy, and above all else don’t make yourself look like an old man yelling at a cloud.

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Record number of Americans are homeless amid nationwide surge in rent, report finds

A growing number of Americans are ending up homeless as soaring rents in recent years squeeze their budgets.

According to a Jan. 25 report from Harvard’s Joint Center for Housing Studies, roughly 653,000 people reported experiencing homelessness in January of 2023, up roughly 12% from the same time a year prior and 48% from 2015. That marks the largest single-year increase in the country’s unhoused population on record, Harvard researchers said. 

Homelessness, long a problem in states such as California and Washington, has also increased in historically more affordable parts of the U.S.. Arizona, Ohio, Tennessee and Texas have seen the largest growths in their unsheltered populations due to rising local housing costs. 

That alarming jump in people struggling to keep a roof over their head came amid blistering inflation in 2021 and 2022 and as surging rental prices across the U.S. outpaced worker wage gains. Although a range of factors can cause homelessness, high rents and the expiration of pandemic relief last year contributed to the spike in housing insecurity, the researchers found. 

“In the first years of the pandemic, renter protections, income supports and housing assistance helped stave off a considerable rise in homelessness. However, many of these protections ended in 2022, at a time when rents were rising rapidly and increasing numbers of migrants were prohibited from working. As a result, the number of people experiencing homelessness jumped by nearly 71,000 in just one year,” according to the report.

Rent in the U.S. has steadily climbed since 2001. In analyzing Census and real estate data, the Harvard researchers found that half of all U.S. households across income levels spent between 30% and 50% of their monthly pay on housing in 2022, defining them as “cost-burdened.” Some 12 million tenants were severely cost-burdened that year, meaning they spent more than half their monthly pay on rent and utilities, up 14% from pre-pandemic levels.

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EVERYONE LOVES A GENEROUS GOVERNMENT UNTIL THEY HAVE TO PAY FOR IT

Governments, like individuals, can spend liberally with great generosity, or they can be frugal. Everyone receiving government money loves the state’s free-spending generosity, as it is “free money” to the recipients.

But there is no such thing as truly “free money,” a reality discussed by Niccolo Machiavelli in his classic work on leadership and statecraft, The Prince, published in 1516. In Machiavelli’s terminology, leaders could either pursue the positive reputation of being liberal in their spending (not “liberal” in a political sense) or suffer the negative reputation of being mean, i.e. miserly, tight-fisted and frugal.

Machiavelli pointed out that the spending demanded to maintain the reputation for free-spending liberality soon exhausted the funds of the state and required the leader to levy increasingly heavy taxes on the citizenry to pay for the state’s largesse.

Once we examine this necessary consequence of liberal spending, it turns out the generous government is anything but generous, as it is eventually forced to impoverish its people to support its spending.

It is the miserly leader and state that is actually generous, for it is the miserly leader / state that places a light burden on the earnings and livelihoods of the citizenry.

As Machiavelli explained, taxes and the inflation that comes with free spending both rob everyone, while the state’s generosity is a political process that necessarily distributes the largesse asymmetrically:

If he is wise he ought not to fear the reputation of being mean, for in time he will come to be more considered than if liberal, seeing that with his economy his revenues are enough, that he can defend himself against all attacks, and is able to engage in enterprises without burdening his people; thus it comes to pass that he exercises liberality towards all from whom he does not take, who are numberless, and meanness towards those to whom he does not give, who are few.

The profligate state and leader fail, for their resources are squandered.

We have not seen great things done in our time except by those who have been considered mean; the rest have failed. A prince, therefore, provided that he has not to rob his subjects, that he can defend himself, that he does not become poor and abject, that he is not forced to become rapacious, ought to hold of little account a reputation for being mean, for it is one of those vices which will enable him to govern.

Machiavelli understood that the positive reputation generated by profligacy decays as quickly as solvency. Everyone loves getting “free money” from the state until the bill comes due: the decay of purchasing power (i.e. inflation), higher taxes and fees, and the ever-increasing burdens of interest to be paid on soaring state debts that squeezes out all other spending.

And there is nothing wastes so rapidly as liberality, for even whilst you exercise it you lose the power to do so, and so become either poor or despised, or else, in avoiding poverty, rapacious and hated. And a prince should guard himself, above all things, against being despised and hated; and liberality leads you to both. Therefore it is wiser to have a reputation for meanness which brings reproach without hatred, than to be compelled through seeking a reputation for liberality to incur a name for rapacity which begets reproach with hatred.

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White House: Economy ‘Exceptionally’ Good and People Like Their Finances, But Don’t Feel Confident Due to COVID, War

On Monday’s broadcast of CNBC’s “Squawk Box,” White House National Economic Council Director Lael Brainard reacted to negative poll numbers on the economy by stating that “the economy is performing exceptionally well” but “people have been through a very challenging few years between the pandemic, and then the oil price spikes associated with Russia’s war. It’s going to take a while for them to feel really confident,” and most people “feel like their personal finances are better now than they were before.”

Co-host Andrew Ross Sorkin said, “Speak to this, though, because I think there [are] a lot of folks who have been waking up to headlines of poll results over the weekend, as it relates to Bidenomics versus, frankly, Trumponomics and where he stands — the president that is — compared to where…the former president stands in terms of how people are thinking about the economy and how, frankly, unhappy they remain about the economy.”

Brainard responded, “Look, if I look around the world, I don’t think there’s a leader out there who wouldn’t rather have the economic record that President Biden has today. We have been growing, 3% over the past year. We’ve had unemployment down below 4% for 21 months in a row. Real incomes are growing. Wealth — this is remarkable — wealth is up 37% for the median household since before the pandemic. And we’re growing faster and have lower inflation than any other advanced economy in the world. So, the statistics, I think, are very strong. Now, people have been through a very challenging few years between the pandemic, and then the oil price spikes associated with Russia’s war. It’s going to take a while for them to feel really confident, but if you look at surveys, 70% of Americans feel like their personal finances are better now than they were before. We’ve still got to work on kitchen table economics, there are still a lot of Americans sitting around their kitchen tables with costs of medicine, pharmaceuticals that are still too high, and we’re working on that.”

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Why Is Halloween Candy So Expensive? Sugar Protectionism.

There ain’t no such thing as free candy, not even on Halloween—as anyone who has stocked up in advance of Tuesday’s holiday can attest.

Candy prices have jumped over 7 percent since last year and are up over 21 percent since October 2021, according to inflation data from the Bureau of Labor Statistics. Even in an environment where everything is getting more expensive, candy prices have climbed even faster than the overall rate of inflation for groceries and other home goods.

The main culprit is rising prices within the supply chains for America’s candy makers—and, specifically, rising sugar prices. Much of America’s supply of the sweet stuff comes from Mexico, where a dryer-than-normal summer meant a below-average sugar crop, Barron‘s reports. The New York Times spreads the blame a bit wider: Everything from high fertilizer prices (thanks to the Russian invasion of Ukraine) to hotter, dryer weather all around the world that affected sugar crops in Asia, Central America, and West Africa.

There is, however, one major factor that the Times ignores entirely: America’s sugar policies.

The series of subsidies and tariffs that the federal government uses to artificially inflate sugar prices in the United States cost consumers between $2.5 billion and $3.5 billion every year, according to a timely Government Accountability Office (GAO) report released today. Those protectionist policies aren’t the cause of the recent spike in sugar or candy prices, of course, but prices would absolutely be lower without them.

The so-called “sugar program” administrated by the federal Department of Agriculture “creates higher sugar prices, which cost consumers more than producers benefit, at an annual cost to the economy of around $1 billion per year,” the GAO concludes. No matter what happens to cause global sugar prices to fluctuate, Americans have consistently paid higher prices over the past 20 years:

Those higher prices get baked—quite literally—into the cost of everything from Milky Ways to Sour Patch Kids. And, as the GAO also points out, this is a classic case of concentrated benefits for a special interest that results in huge, but very diffused, costs for everyone else: “Because the program guarantees relatively high prices for domestic sugar, sugar farmers benefit significantly, and sugar farms are substantially more profitable per acre than other U.S. farms.”

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