The average American has lost more than $4,000 in annual income since President Biden took office due to soaring inflation and higher interest rates thus wiping out income gains under the previous administration, according to data compiled by the Heritage Foundation.
Experts at the conservative think tank analyzed consumer prices data and the Federal Reserve’s interest rates and found in a Friday report that Americans have lost the equivalent of $4,200 of income per capita since January 20, 2021.
Consumer prices have risen 12.7% since January 2021, much faster than wages, which Heritage analysts say has cost the average American worker $3,000 in annual purchasing power.
Additionally, the tightening monetary policy by the Federal Reserve and increased borrowing costs on mortgages, vehicle loans and credit cards – caused by higher interest rates – have reduced the average American’s purchasing power by another $1,200 per year, Heritage Foundation says.
"Simply put, working Americans are $4,200 poorer today than when Biden took office," EJ Antoni, research fellow in regional economics with The Heritage Foundation’s Center for Data Analysis, said in a press release. "This financial catastrophe for American families is the direct result of a president and Congress addicted to spending our money, combined with a Federal Reserve compliantly enabling this addiction by printing more dollars."
Antoni told Fox News Digital that the average household has lost roughly $7,200, a number calculated by doubling the inflation number of $3,000 and adding $1,200 in losses from interest rates.
The $4,200 loss figure erases the average American worker’s real annual earnings increase of $4,000 that occurred during the Trump presidency, according to Heritage.
"Washington recklessly spent trillions of dollars it did not have and paid for it with newly printed money, causing rampant inflation that has destroyed people’s purchasing power and jeopardized Americans’ financial futures," Antoni said.
Antoni explained that many Americans have taken on additional debt to cover their cost of living while rates on all kinds of consumer debts are rising. At the same time, mortgage rates and interest rates have doubled since Biden took office which is greatly increasing the monthly payments Americans are facing.
"We are in a vicious spiral, but it’s one of Joe Biden, the Democrat-controlled Congress, and the Fed’s own making," Antoni said.
The White House did not immediately respond to a request for comment from Fox News Digital.
The $4,200 figure from Heritage Foundation represents an increase from July when the think tank reported a $3,400 loss in revenue for the average American worker under Biden.
The Heritage Foundation report comes days after the Federal Reserve raised its benchmark interest rate by 75 basis points for the third straight month as it struggles to bring down skyrocketing inflation.
The move puts the key benchmark federal funds rate at a range of 3% to 3.25%, the highest since before the 2008 financial crisis. It marks the fifth consecutive rate increase this year.
"We have got to get inflation behind us," Federal Reserve Chairman Jerome Powell said during a post-meeting press conference in Washington. "I wish there were a painless way to do that. There isn’t."
Despite the slew of aggressive rate increases, however, inflation has remained stubbornly high. It ran even hotter than expected last month, with the consumer price index, a broad measure of the price for everyday goods that includes gasoline, groceries and rents, increasing 0.1% in August from the previous month, dashing hopes for a slowdown. On an annual basis, inflation is running at 8.3% — a nearly 40-year high.
Fox News' Caitlin McFall contributed to this report