Joe Biden may have hoped that Santa would drop some good economics news into his Christmas stocking. Instead, the latest key economic measure from the BEA shows inflation hitting another 39-year high in November. On top of that, consumer spending has slowed as well, setting up a bad dynamic to kick off the 2022 midterm year:

Personal income increased $90.4 billion (0.4 percent) in November according to estimates released today by the Bureau of Economic Analysis (tables 3 and 5). Disposable personal income (DPI) increased $70.4 billion (0.4 percent) and personal consumption expenditures (PCE) increased $104.7 billion (0.6 percent).

Real DPI decreased 0.2 percent in November and Real PCE increased less than 0.1 percent; spending on services increased 0.5 percent and spending on goods decreased 0.8 percent (tables 5 and 7). The PCE price index increased 0.6 percent. Excluding food and energy, the PCE price index increased 0.5 percent (table 9).

As CNN points out, the PCE price index hasn’t been this high since mid-1982:

A key measure of US inflation rose 5.7% in the 12 months ended in November, the Bureau of Economic Analysis said Thursday. It was the fastest increase in the consumer spending price index since July 1982.

For anyone hoping there would be an end to the exorbitant climb in prices before year-end, this was a disappointment.

Prices rose 0.6% last month, less than the 0.7% increase from October. Excluding volatile food and energy costs, prices rose 0.5%, unchanged from the prior month.

And just as before, inflation keeps outstripping wage gains:

American incomes also rose last month, but not as quickly as prices.

The New York Times isn’t impressed either, noting that the PCE price index impact is broad and sustained:

The Personal Consumption Expenditures price index, which is the one the Fed officially targets when it aims for 2 percent annual inflation on average over time, climbed 5.7 percent in November from a year earlier.

Part of the jump owed to gasoline prices — they were up sharply in November but have moderated this month — but a so-called “core” index that strips out food and fuel prices also increased sharply, to 4.7 percent.

Rapidly rising prices are lasting longer than policymakers had hoped and have become broader in recent months, and the new data point reconfirms the pop that a more timely and related measure — the Consumer Price Index — had previously shown. Earlier this year, big price increases were largely reserved to goods that were in short supply as demand surged and as overtaxed shipping lines struggled to keep up. More recently, they have spread into categories like rent — which can be more long-lasting.

As a result, the Wall Street Journal points out that consumer spending has slowed even in a holiday season. The momentum for a strong fourth quarter “continues to fade,” one analyst told them, and it appears that much of the demand for consumers got front-loaded into October:

U.S. consumer spending rose 0.6% last month, after climbing 1.4% in October, the Commerce Department reported Thursday. Holiday shoppers snatched up gifts earlier than usual this year in anticipation of product shortages, helping to boost spending in October while contributing to a November sales slowdown, economists say.

Overall, consumers remain in solid shape. Low unemployment, substantial savings and briskly rising wages are giving Americans money to spend. Consumers felt more optimistic about the economy in early December, heading into the last weeks of the holiday season, according to the Conference Board, a private research group.

“We are still on track for very strong fourth-quarter consumption, but I am now seeing that that momentum continues to fade,” said Aneta Markowska, chief economist at Jefferies LLC.

The WSJ offers an anecdotal example of how inflation curbs real consumer spending:

David Esguerra, a 35-year-old from Phoenix, said he has seen prices rise rapidly. Pet-grooming services—including a bath and nail trimming—for his terrier mix Sofie have shot up to about $80 from $60 last year. Croissants at the farmers market cost roughly $6 this year, up from $4 in 2020, he said.

The supply-chain engineer’s pay raise this year was below the rate of inflation. As a result, he has adjusted his spending habits. For instance, he sought out furniture on secondhand markets like Craigslist to outfit his new home, and he is cutting back on purchases of clothes, shoes and phone accessories.

That plus the lack of available goods in the supply chain has consumers sitting on their wallets. That’s bad news for an economy as oriented to consumer spending as ours. Combine that with the massive increases in rent and housing prices over the past year, and we may run out of capacity to spend our way into real growth.

Needless to say, this could hardly come at a worse time for the Biden administration. They have focused entirely on their social-engineering and climate-change agenda, preferring big-spending programs to finding ways to tame inflation and fix supply chains. The disconnect from the lived experience of voters has gotten so profound at the White House that Jen Psaki actually claimed that Biden had “saved Christmas” and fixed all of the economic problems:

The spirit of Baghdad Bob lives in the White House Christmas celebrations, it seems.