- The May core personal consumption expenditures price index, an important inflation gauge for policymakers, rose 3.4% from a year ago, in line with Wall Street estimates.
- That was the biggest increase since 1992 and reflective of ongoing price pressures.
- Consumer spending was flat for the month, missing expectations, while personal income declined 2%, less than the expected 2.7% drop.
The New Hotness? Welcome Back, Smoot-Hawley! Here’s How Biden Is Making It Even Harder to Buy a Home:
One important question to ask, for instance, would be how does the tariff impact American industries that purchase lumber? The answer: they have to pay higher prices.
The burden of these increased production costs inevitably ends up being passed onto consumers. Basic economics tells us that when the price of one resource used to produce a good goes up, the price that the consumer eventually pays for that good rises as well.
This is exactly why home buyers — and consumers of products that use lumber in general — will be the victims of Biden’s lumber tariff.
A shortage of lumber as a result of the pandemic led to its price in May being up nearly 400 percent over the past year. But prices have begun to drop again because production has started to ramp up. To increase the tariff — which is just an import tax — would serve to restrict the supply of lumber. This would not allow prices to decrease back to pre-pandemic levels.
The natural consequence of high lumber prices is the increase in price for all of the goods that use lumber in their production. This does not just stop at houses, but rather includes things such as furniture and storage appliances as well. The average consumer will then have to pay a higher price for all of them.
UT HE’S FROM THE GOVERNMENT AND HE SAID HE’S HERE TO HELP: Biden’s ‘Child Allowance’ Will Harm the Economy.
Soaring consumer prices and stubbornly high unemployment are the hallmarks of the Biden economy.
The reasons are as obvious as they were predictable, especially for those who dare to venture outside Washington, D.C. For months, I have warned that President Biden’s gigantic American Rescue Plan included needless government stimulus that would have devastating ripple effects.
While most critics’ focus so far has been on the plan’s extension of federal unemployment benefits, which effectively pay people not to work (and which states like Florida are thankfully ending), the package’s radical expansion of the federal welfare state has been relatively overlooked. That won’t be for long, as the plan’s new handout — Biden’s so-called child “allowance” program — will begin in July.