(NBC) — The direction of the U.S. economy is befuddling the experts again and rattling investors in a huge way as the latest consumer price index data finds inflation in August was mostly unchanged, despite the fed’s actions to cool soaring prices.
Inflation was up 8.3% last month over a year ago. Nowhere was the disappointment expressed more profoundly than on Wall Street where it experienced its worst day in over two years.
All three major indexes suffered big losses. The DOW was off nearly 4%, the S&P was down more than 4% and the NASDAQ dropped more than 5%.
Wall Street is bracing for more interest rate hikes by the Federal Reserve Board after steadily falling gasoline prices have failed to offset the rising costs of other things consumers buy.
From the price tags in the checkout aisle to the cost of keeping the lights on, and even the size of the rent check.
New data today shows what so many Americans are feeling. The price of nearly everything is stubbornly high, up 8.3% compared to a year ago. That’s putting more pressure on the Federal Reserve to continue aggressively raising interest rates when it meets next week.
“We have more to do, but we’re getting there,” President Biden said.
The higher-than-expected inflation numbers are unwelcome news for Biden, who on Tuesday celebrated the passage of the Inflation Reduction Act.
“We had a vision, a plan and we stuck to it and the result is we’re getting the job done for the American people,” Biden said.
Republicans slammed the White House ceremony on Tuesday, saying it was out of touch.
“Democrats’ policies are sucker punching American families every time they set foot in the checkout line,” Sen. Mitch McConnel said.
While the national average for a gallon of gas is now down a $1.30 from the all-time high in June, it’s still up 16% compared to a year ago.
The following are also soaring:
- Electricity: Up 15.8%
- Rent: Up 6.7%
- Groceries: Surging 13.5% — the biggest yearly spike in more than 4 decades
Those rising prices are pushing more people to food banks like one in Burlington, New Jersey where Glenda Wimberly volunteers.
“This is a blessing for the community and is a big blessing for me,” Wimberly said.
The 70-year-old grandmother isn’t just a volunteer, she also relies on the food bank to feed the three grandchildren she is raising.
“You go in and spend $50, you got like five things in the cart and say ‘what happened to my money, where’s the food,’” Wimberley said.
While average hourly wages are up 5.5%, inflation more than wipes out those gains and is no help to people on a fixed income like Wimberly.
“It’s like a red neon sign flashing that can’t spend that can’t go there. Can’t do that. It’s very difficult,” Wimberly said.