Fox Business/screen grab
A Fox Business correspondent didn't sugarcoat Thursday's grim economic data, telling viewers point-blank that rising prices are outpacing what workers bring home.
"Inflation is wiping out wages," correspondent Lauren Simonetti said on Varney & Company, reacting to two government reports released Thursday morning that painted a bleak picture for everyday Americans.
The reports landed as a gut-check for a president who promised voters he would lower costs on day one.
The Federal Reserve uses a measure called the personal consumption expenditures index — essentially a broad gauge of what Americans pay for goods and services — to track inflation. In April, that gauge rose 3.8% over the past year, a three-year high and a step up from 3.5% in March. Paychecks aren't keeping pace: wages grew just 3.6% over the same period, meaning workers are effectively taking a pay cut in real terms.
A separate report showed the economy grew more slowly than initially thought — first-quarter GDP was revised down to 1.6% from an initial read of 2.0%, missing Wall Street's expectations.
The strain is showing up in how Americans are managing their money. The University of Michigan's Consumer Sentiment Index plunged to a record low in May, with 57% of consumers saying high prices are eating into their finances. More than half of U.S. adults are now using credit cards to cover basics like groceries, rent, and utilities, according to a Debt.com survey. The personal savings rate has fallen to 4.0% — down from 6.2% in early 2024.
Gas prices aren't helping. The national average for regular gasoline hit a four-year high heading into Memorial Day weekend, with California topping $6 a gallon, according to AAA.
Host Stuart Varney acknowledged the pain but kept his chin up. "Not that bad," he said — twice.
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