TIPP Insights: Americans make lifestyle sacrifices as Bidenflation holds at 12.6%

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The government’s Consumer Price Index (CPI), released this week on Wednesday, showed an 8.5% year-over-year increase in consumer prices for various goods and services from July 2021 to July 2022. The CPI edged down from a 40-year high of 9.1% in June to 8.5% in July.

The official CPI does not tell the whole story of price increases under President Biden. Bidenflation, measured by the TIPP CPI, using the same underlying data, stood at 12.6% in July. It was 12.7% in June.

We developed the TIPP CPI, a metric that uses February 2021, the month after President Biden’s inauguration, as its base.

All TIPP CPI measures are anchored to the base month of February 2021. January 2021 was a mixed month under the watch of two presidents, two-thirds by President Trump and one-third by President Biden, so we chose to ignore it, making the TIPP CPI exclusive to the economy under President Biden’s watch. Please note that we use the relevant Bureau of Labor Statistics (BLS) underlying data but recalibrate it to arrive at the TIPP CPI.

Significant inflation had already set in by the middle of last year. In July 2021, CPI inflation was 5.4 percent. The official CPI will compare future month prices to already inflated bases in the coming months. The year-over-year calculation may moderate the statistics, but you will still feel the pinch of inflation.


The following three charts present more details of the new metric.

The official CPI reported by BLS is 8.5% for July 2022. Compare this to the TIPP CPI of 12.6%, a 4.1-point difference. Prices have increased by 12.6% since President Biden took office.

Food prices increased by 13.7% since President Biden took office compared to only 10.9% as per BLS CPI, a difference of 2.8 points.

Energy prices increased 52.6% per TIPP CPI compared to 32.9% according to BLS CPI, a difference of 19.6-points.

The Core CPI is the price increase for all items, excluding food and energy. The Core TIPP CPI was 9.2% compared to 5.9% BLS CPI in the year-over-year measure, a 3.3-point difference.

More specifically, gasoline prices have increased by 79.1% since President Biden took office. However, the BLS CPI for gasoline is 44.0%, a difference of 35.1 points.

Used car prices have risen by 42.2% since President Biden took office. The BLS CPI does not capture the pain and posts a relatively moderate 6.6%, a difference of 35.6 points.

Inflation for air tickets under President Biden is 57.8% compared to BLS CPI of 27.7%.

Americans’ Concerns

The latest Investor’s Business Daily/TIPP Poll completed last week shows that nearly nine in ten (86%) of survey respondents are worried about inflation. Over the past 12 months, inflation concerns have stayed above 80%. The share of “very concerned” has been around 50% consistently.

Most respondents (54%) say their wages have not kept pace with inflation. Only one in six (17%) say that it has. The share who said wages had kept pace has hovered in the 17% to 20% range since January 2022.

As a result of inflation, Americans are cutting back on household spending.

Almost three-quarters (76%) of respondents said they had reduced household spending. Cutting expenses was seen among people of all ages and income levels.

Among those cutting back, most are spending less on entertainment (92%), eating out (92%), purchases of big-ticket items (90%), holiday/vacation travel (88%), and memberships/subscriptions (77%).

The high gasoline prices forced 76% to cut back on local driving. Many (73%) are cutting back on even good causes such as charity giving. Over two-thirds (70%) of households are spending less on groceries.

The United States is experiencing stagflation, defined as high inflation combined with an economic slowdown. In the coming days, we’ll cover the topics of recession, economic confidence, and financial stress.

To access the TIPP CPI readings each month, you can visit tippinsights.com. In the future, we’ll publish the TIPP CPI and our analysis on the day following the Bureau of Labor Statistics (BLS) report. The upcoming releases of TIPP CPI are on September 14, October 14, November 11, and December 14. We’ll also post a spreadsheet in our store for free download.



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