Fact check: Is inflation costing Americans $175 a month?
Chuck Grassley, R-Iowa, a member of the U.S. Senate Finance Committee and its former chairman, has tied inflation costing households an extra $175 a month to President Biden. PolitiFact checks his claim.
Posted — UpdatedIowa’s prodigious congressional tweeter, Republican U.S. Sen. Chuck Grassley, attempted to put inflation into terms Iowans and others could understand: via their pocketbooks.
"Welcome 2 Pres Biden’s America where inflation is costing households an extra $175 a month," he wrote on Twitter the evening of Tuesday, Oct. 19.
The twitterverse was quick to respond:
"This is a lie," yet another wrote. Not quite, although Grassley’s source for the $175 per month says it applies to a salary of $70,000. It doesn’t apply for all households.
"My $175 per month is derived by the difference in current CPI inflation of over 5% and typical CPI inflation of over 2%, or 3 percentage points, times the median income of $70,000 and dividing by 12," Mark Zandi, chief economist at Moody’s Analytics, wrote in an email to PolitiFact Iowa. "Pretty straightforward."
That extra 3 percentage points out of $70,000 equals $2,100 annually.
Grassley specifically was referencing Zandi’s analysis in his tweet, Grassley press secretary Katelyn Schultz wrote in an email to PolitiFact Iowa.
Disregarding the typical inflation rate when determining the loss of spending power could paint an even bleaker but inaccurate picture of what consumers could have expected from their dollars this year.
Other factors come into play when assessing buying power. For example, more people have jobs now than in January. Gains have been made in leisure and hospitality, professional and business services, retail trade, transportation and warehousing, the Bureau of Labor Statistics reported in October.
PolitiFact ruling
Inflation in President Biden’s America is costing households an extra $175 a month, Sen. Chuck Grassley tweeted to his followers Oct. 19.
Inflation is currently at an unusually high level, but the $175 per household figure, which was calculated by a credible economist, is for the median-income household, and the impact on other households could be higher or lower depending on total income earned.
There are also a few caveats to note. The current level of inflation is not all traceable to Biden’s policies; some of the federal spending increases blamed for inflation were approved on a bipartisan basis during the pandemic and were signed by Trump.
It’s also worth noting that wages have gone up modestly, helping households cope with some, but hardly all, of the increase in prices.
The statement is accurate but needs additional information, so we rate it Mostly True.
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