While government statisticians claim robust growth, recent data points suggest otherwise. Consumers are quickly running out of money, home sales have collapsed and hit their biggest drop in three years, there are more Americans out of the labor force than ever before, and one third of adults under the age of 35 are living with their parents because they can no longer afford to pay their own mortgage.
By all accounts, the reality is that we are now factually in a recession, a point further emphasized by the recent revelation that American companies are experiencing near zero percent earnings growth.
But that’s just the beginning. As we warned earlier this year, food prices would see a steady rise through 2014 because of increased global demand, drought and continued degradation of the U.S. dollar.
The Producer Price Index made available by the Bureau of Labor and Statistics this morning has now confirmed those fears. Consumers are seeing an immediate impact to their wallets in the form of food price inflation and in all likelihood the trend will continue going forward.
These latest numbers are serious. So much so that according to Zero Hedge, “the last time food prices spiked by this much in one month, the resulting Arab Spring wave of revolutions tumbled governments across north Africa and the middle east.”
The trend over the last several months shows a clear and sustained rise in prices for food, something that nearly 50 millions are already struggling to acquire, even with assistance from the government. Now their food stamps buy even less. And if people are spending more on food, it means they’ll be spending less in other sectors of the economy.