WASHINGTON — The government delivered a triple dose of bad news for consumers Thursday that roughly added up to this: If your wallet seems thinner than it used to be, it's not your imagination.
Real earnings are in decline. Consumer prices are on the rise. And there are signs that more job losses may be on the way. Despite the recent decline in oil prices, many economists expect the situation for consumers to get worse before it gets better.
Things are not getting any better for Hubert Evans. In the last month, the Albertsons supermarket in Baldwin Hills where he's a meat department manager reduced his hours to 40 from 48 a week. That means his earnings are falling, even as the prices for the groceries his store sells rise, along with other goods.
"This year, everything about the economy went haywire, and it's making it really rough. I can't remember anything like this," Evans said.
Consider the numbers the government released Thursday. Consumer prices surged 0.8% in July from the month before and chalked up a 12-month inflation rate of 5.6%, the Labor Department said Thursday.
That's the highest rate of annual inflation since 1991. At the same time, workers' earnings are shrinking.
The department said workers' average earnings, adjusted for inflation, fell 3.1% in July from a year earlier. Real earnings have declined for 10 straight months, government data show.
"The last time we saw a decline like this was in the recession of 1991," said Nigel Gault, chief U.S. economist at Global Insight, an economic forecasting firm in Lexington, Mass.
But the view on Wall Street was more positive. Many investors expect inflation to ease soon because the prices of oil and other commodities have tumbled in recent weeks -- declines that occurred too late to show up in July consumer prices. The Dow Jones industrial average rose 82.97 points, or 0.7%, on Thursday to close at 11,615.93. The bond market, which is especially sensitive to inflation fears, was calm.
However, the problem for consumers is "they are not even running in place. They are moving backward," said Joel Naroff, president of Naroff Economic Advisors.
That's the experience of Raquel Miranda of Los Angeles, who was shopping for a swimsuit at Kohl's in Alhambra with her 5-year-old daughter.
"We're investing our money in gas and groceries, so the extra stuff like clothes and shoes is really a luxury," Miranda said.
