As a conservative who lives on the left coast in California, the changes in what used to be the Golden state are depressing for those who can remember the booming 80s during President Ronald Reagan’s eight years in office.
In what might shock you, California and 48 other states voted for Reagan’s re-election in 1984.
In just 17 months, Joe Biden has managed to turn the U.S. economy, energy production, and illegal immigration management into a proverbial nose dive, towards total collapse.
In California, it is becoming difficult to find a gas station under $6 per gallon, up from $3.62 in the middle of President Trump’s term in office.
U.S. households are expected to spend an average of $5,000 on gasoline this year.
Yardeni Research concluded that Americans are paying considerably more at the pump this year, CNBC reported. By Yardeni Research’s estimates, Americans were spending a mere $2,800 last year.
The rapid pace at which gas prices continue to increase drastically affects the estimated annual sum Americans are expected to pay. This past March, Americans were expected to pay an estimated $3,800 at the pump in 2022.
The American Automobile Association (AAA) reported that in March the national average for a gallon of regular gasoline was $4.22. CNBC noted that the average price for a gallon of gasoline during the week of May 16 was $4.59. A year ago, at this time, a gallon of gasoline was $3.04.
“No wonder the Consumer Sentiment Index is so depressed. The wonder is that retail sales have been so surprisingly strong during April and May,” Yardeni said in a note.
Yardeni stated that the inflation-adjusted incomes of most consumers are barely growing and that they have accumulated a decent amount of savings while charging a lot more on their credit cards.
However, similar to those who put on weight or drink too much when stressed out, Yardeni’s study indicates that the American consumers’ spending has increased, which might give the economy an illusion of strength.
Yardeni stated, “When we are happy, we spend money. When we are depressed, we spend even more money!”
The problem is some of the extra spendings is being charged to the consumer’s Visa / Mastercards. The dilemma for them is what happens the following month after the credit cards are maxed out?
Despite the Consumer Price Index surging by 8.3% in April and a massive technology stock sell-off, retail sales rose by 8.2%.
Gasoline sales had declined in April from March, before ramping up to record levels in early May. Spending on gasoline in April increased by nearly 37% from a year ago, according to data from the Department of Commerce.
Not only are Americans paying more for necessary products, like gasoline, but their earnings in real wages are falling rapidly.
As inflation continues to spiral out of control, the average hourly earnings for employees on private nonfarm payrolls are not keeping up. Their payrolls rose only 0.3% in April, far lower than what economists had forecast.
To put this in perspective, 0.3 % growth pails in comparison to April’s inflationary increase of 8.3% and March’s 8.5% increase.
According to this data, the real earnings of Americans appear to be falling by multiple percentage points.
Economic experts expect are sounding the possible recession alarm. At a minimum, similar economic woes are expected to continue throughout the world as global stock markets continue to hemorrhage money.