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WASHINGTON — New data from the Labor Department confirm what most middle-class Americans already know: Inflation is squeezing them.
As consumer prices rose by 4.1 percent last year, the highest rate since 1990, the prices of basic essentials such as food, gasoline and health insurance climbed far more steeply, explaining why so many Americans are telling pollsters that the economy is their chief concern.
Digging deeper into the data reveals, for example, that the price of bread rose 7.4 percent last year, almost twice the rate of inflation.
It's not just rising food prices that are pinching the budget of working Americans. The price of health insurance, another major political campaign theme, rose by 10.1 percent last year. Medical inflation also continued to outpace the broader consumer inflation rate. The price of medical care nationally rose by 5.8 percent in 2007 and the price of medical care services rose by 5.3 percent.
But consumers perhaps most felt the energy-price squeeze. Gasoline prices rose 8.2 percent on average last
year, the slowest rate of growth since 2002. But pump prices began climbing anew in October and for the last quarter of 2007 average prices rose by just more than 30 percent.
This partly explains why the economy so frustrates Americans.
"From a standpoint of the consumer, they react to (inflation) like a tax increase. They feel less wealthy, they feel pinched and they are looking for institutions or people to blame," said William Beach, an economist and the director of data analysis for the Heritage Foundation, a conservative policy-research organization.
Originally posted by SEEWHATUDO
reply to post by marg6043
yes and see this is what I dont understand...why would you systematically wipe out the class that makes the consumerism economy stay afloat?
Unless there is a plan in place to change how our economy works...
or we are going to be a country where the minority is fat cats and the majority are the homeless.
I am sick and tired of hearing about these millions and billions of dollars bailing out all these worthless, piece of poop corporations that are driving the nails into the coffin of the dieing middle class.
If this government actually cared about it's citizens they would let the fat cats sink and help the middle class get back on its feet but that is never going to happen.
And then where is our country? with very little consumerism, service jobs are gone and our country is starving. Well that just seems like a great plan right?
...goes on to explain the magic of hedonics, geometric weighting, substitution, and seasonal adjustments that are now applied to the reported CPI. He then explains why the use of a "core rate" is a fraud.
Federal Reserve Chairman Ben Bernanke told Congress Thursday that legislators should enact a fiscal stimulus package in order to help beleaguered consumers as recession fears grow.