What Falling Inflation Really Means For Your Wallet

Inflation “cooling” sounds like good news until you’re standing at the checkout watching the total climb again. We take a no talking points look at what the latest inflation data actually says and, more importantly, what it does not say. A lower inflation rate usually means prices are still rising, just more slowly, and that difference is why families can hear “progress” while their budgets still feel trapped.

We break down the June 2026 numbers in plain English: CPI versus the PCE price index, what drove the rare monthly decline, and why core inflation still matters. Then we connect the national story to Arizona where energy costs can dominate real life. Phoenix area inflation may look manageable on paper, yet Arizona gasoline around $4.44 a gallon and diesel around $5.59 can squeeze commuters, small businesses, and rural communities that drive long distances for work, school, groceries, and medical care. We also dig into housing affordability, mortgage rates above 6.5%, and why wages that “keep up” on average can still leave purchasing power barely improved.

Then we zoom out to principles: what the founders learned from unstable currency, why inflation acts like a hidden tax, and why fiscal responsibility and honest accounting still matter. We close with practical steps that focus on results, including taking deficits seriously, building a reliable energy strategy, reducing cost raising regulations and tariffs where appropriate, expanding attainable housing supply in Arizona, and refusing to hide behind national averages.

Subscribe to the Walt Blackman Show, share this with someone feeling the squeeze, and leave a review with what expense has increased the most in your household.

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Constitution First Show Opening

SPEAKER_00 0:03

This is the Walt Blackman Show. From the deserts of Arizona to the halls of the state capitol, where liberty is defended. The Constitution isn't a campaign prompt, and the rule of law is not optional. No selective amendments, no tribal loyalty, no elevating personalities above principle. Here, the Constitution comes first because it protects the citizen, restrains power, and safeguards the republic. Not a party, not a movement, not any person. No one stands above it. Not now, not ever. Power is temporary. Principle is permanent. The Walt Blackman Show starts now.

Inflation Headlines Versus Real Prices

SPEAKER_01 0:47

Welcome to the Walt Blackman Show. I'm Walt Blackman, and today we're talking about inflation, not political talking points, not campaign spin, but what the numbers actually say and what Arizona families are experiencing at the grocery store, the gas station, and when they try to buy or rent a home. Here is the bottom line. The latest monthly inflation report was encouraging, but inflation is not defeated. Prices are still substantially higher than they were several years ago. Energy costs remain a serious problem, and many working families are barely keeping pace. So when someone tells you inflation is falling, remember this a lower inflation rate does not necessarily mean prices are falling. It usually means prices are increasing more slowly. That is like the cashier looking at a cart full of groceries and saying, good news, your bill is still going up, but now it is going up more politely. Well, wonderful, somebody notify my bank account. It can stop hyperventilating. That distinction matters. The newest consumer price index report covers June 2026. Nationally, consumer prices were 3.5% higher than they were one year earlier. That is an improvement from the 4.2% annual rate reported in May. And overall, prices actually declined four-tenths of 1% during June. That was the largest one-month decline since April 2020. On the surface, that sounds like excellent news. But most of that monthly decline came from energy prices falling after several months of major increases. Core inflation, which removes the volatile food and energy categories, was unchanged during June and increased 2.6% over the year. That is movement in the right direction, but it remains above the Federal Reserve's 2% long-term target. The Federal Reserve's preferred inflation measurement tells an even more cautious story. The personal consumption expenditure's price index was 3.7% higher than a year earlier. Core PCE inflation was 3.3%. These measurements use different baskets and weighting methods, so neither number is necessarily wrong. Together, they tell us inflation has moderated, but it has not returned to normal. So here's the uncomfortable truth. We now have multiple official ways to measure inflation. CPI says one thing, PCE says another. If two thermometers give you slightly different readings, but both say you have a fever, you don't argue with the thermometers. You start asking why the room is on fire. John Adams once warned about what he called downright ignorance of the nature of coin, credit, and circulation. More than two centuries later, we're still arguing about inflation without first making sure everyone understands what the numbers actually mean. There is another number that deserves much more attention. The overall consumer price index is approximately 27.7% higher than it was in January 2021. In simple terms, a typical basket of goods and services that cost approximately $100 in January 2021 would cost close to $128 today. $28 extra dollars for the same basic basket. Same bread, same eggs, same milk, unless the cow hired a lobbyist, the chickens unionized, and the loaf of bread landed a federal contract. Sounds ridiculous? Don't worry. Our founders agree that rumbling you hear isn't thunder. It's them rolling over in their graves. The Bureau of Labor Statistics calls it a change in the consumer price index. A working parent calls it, well, kids, good news, inflation is slowing. Bad news, no college for you, but congratulations, you've been accepted to aisle 7 university, where you can major in comparing cereal prices and minor in putting things back. Washington says inflation is cooling. Cooling? If you turn a blowtorch from high to medium, your house is still on fire. The electric company doesn't accept trend lines, the landlord doesn't take seasonally adjusted checks, and the grocery store will not let you pay with a government press release. That is why families can hear that inflation is improving and still feel as though they are losing ground. The inflation rate measures how quickly prices are changing. It does not erase the increases that already occurred. If the price of something rises from $100 to $130 and then inflation slows, the price does not automatically return to $100. It may simply rise from $130 to $132 instead of rising to $138. That is the reality many politicians fail to explain.

Arizona Numbers And Fuel Shock

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The Phoenix area consumer price index increased 2.8% during the year ending in June. Core inflation in the Phoenix area was 2%, food prices increased 2.2%, and shelter costs increased 1.4%, but energy prices increased 14.1%, and Phoenix area gasoline prices were 26.2% higher than they were a year earlier. Remember that these figures cover the Phoenix metropolitan area. They are not a complete measurement of rural Arizona. Families in communities like Snowflake, Solo, Payson, Globe, Holbrook, Winslow, and Florence often have to drive longer distances for work, school, medical appointments, groceries, and basic services. That means fuel prices can take an even larger bite out of a rural family's budget. As of August 3rd, AAA reports that regular gasoline averages approximately $4.44 per gallon in Arizona. That is about 39% higher than the Arizona average of approximately $3.20 one year ago. At $4.44 a gallon, the gas pump should at least send you a thank you card, maybe offer a rewards program, buy 10 gallons, and receive one complimentary moment of despair. Diesel is averaging approximately $5.59 per gallon. When diesel rises, the impact does not stop with truck drivers. Those costs eventually reach agriculture, construction, public safety, school transportation, shipping, and the prices consumers pay for products delivered to rural communities. Diesel becomes an invisible passenger riding inside nearly everything we buy. And unlike the rest of us, that passenger never offers to split the cost. Energy inflation spreads through the entire economy. National food prices increased 3% over the past year. Grocery prices increased 2.7%. Restaurant prices increased 3.4%, and fruits and vegetables increased 5.3%. Shelter costs increased 3.3%

Housing Costs Rates And Wage Reality

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nationally. Shelter inflation slowed during June, which is encouraging, but housing affordability remains one of the country's greatest economic challenges. The average 30-year fixed mortgage rate was 6.66% at the end of July. At that rate, the house comes with three bedrooms, two bathrooms, and a financial relationship that may last longer than some governments. Consider what that means for a young family trying to purchase its first home. They are not only dealing with higher home prices, they are also financing that home at an interest rate that can add hundreds of dollars to the monthly payment. Inflation affects families twice, first through higher prices and then through the higher interest rates used to control those prices. The Federal Reserve held its federal funds target range at 3.5 to 3.75% during its July meeting. Three Federal Reserve officials actually wanted to raise rates by another quarter point. That disagreement tells us the fight against inflation is not over. Average hourly earnings increased 3.5% over the past year, the same rate as headline consumer inflation. After adjusting for inflation, the Bureau of Labor Statistics calculated that real average hourly earnings increased only one-tenth of one percent. One-tenth of one percent. So don't spend it all in one place. That's not a pay increase. That is your paycheck making brief eye contact with inflation before inflation walks away with its lunch money. In other words, the average worker's purchasing power barely improved. For production and non-supervisory workers, real hourly earnings actually declined one-tenth of 1% over the year. That is why a pay raise may not feel like a raise. If wages rise 3% while a family's major expenses rise 4 or 5%, that family is still moving backward.

Why Inflation Has Many Causes

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The national averages also hide significant differences. A homeowner with a fixed mortgage may experience inflation differently than a renter. A rural family that drives 70 miles for medical care will feel fuel inflation differently than someone who works from home. And every family has its own inflation rate. There is no single cause. There is apparently a committee of causes because even inflation has discovered that the best way to avoid responsibility is to form a committee. Energy supply disruptions and conflict in the Middle East have driven up oil, gasoline, diesel, and transportation costs. Housing supply remains constrained in many communities. Building delays, land use rules, infrastructure limitations, construction costs, and interest rates all affect the final cost of housing. Businesses are also facing higher costs. The producer price index was 5.5% higher than it was a year earlier, even though producer prices declined during June. That suggests some businesses may still face pressure to raise prices, reduce hiring, delay expansion, or accept smaller profit margins. Trade restrictions and tariffs can increase the cost of imported products and manufacturing inputs. Government deficits can add demand to an economy when supply cannot keep up. Excessive regulation can restrict energy, housing, transportation, and production. At the same time, global conflicts, weather disease, labor shortages, and disrupted supply chains can push prices higher regardless of which political party holds office. Meanwhile, every political faction points at somebody else, and the price tag sits quietly in the corner getting larger. No president, governor, legislature, or central bank controls prices with a single switch. But government decisions can make inflation better or worse. We should judge those decisions by their results, not by which party proposed them. Before we continue, I want to thank everyone listening to the Walt Blackman Show. You can find the show on Apple Podcasts, Spotify, Amazon Music, iHeartRadio, YouTube Music, Pandora, Podcast Addict, and Player FM. You can also go directly to the Walt Blackman Show.buzzsprout.com. Watch our live broadcasts on YouTube, Facebook, X, and TikTok. If you value honest conversations about Arizona, public policy, the Constitution, and the future of our country, please follow, like, and share the Walt Blackman Show. Your support helps us reach more people and keeps these important conversations going. And now let's get back to the

What The Founders Warned About

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show. Before discussing solutions, let's ask a deeper question. How would America's founders view what is happening today? The founders did not have a modern Federal Reserve electronic banking, credit cards, or a global economy like ours. We should be careful about placing 21st century policy positions into their mouths. They also disagreed among themselves. And imagine this: if Hamilton and Jefferson could turn a two-minute podcast introduction into a three-hour argument, four newspaper attacks, six anonymous pamphlets, and possibly a duel. In that respect, American politics has preserved the founding tradition perfectly. Nobody listens, everybody shouts, and someone always publishes a statement. Hamilton supported a national bank and believed properly managed public debt could strengthen the country. Jefferson and Madison heard National Bank the way a working parent hears adjustable interest rate, grab your wallet, lock the door, and back away slowly. Hamilton viewed debt as a useful financial tool. Jefferson viewed it like a distant relative who asked to stay for one weekend, empties the refrigerator, takes over the couch, and is still there 30 years later. But despite those disagreements, the founders shared several principles that applied directly to inflation. The first was the importance of stable and trustworthy money. The revolutionary generation lived through the collapse of continental currency. They witnessed what happened when confidence in money disappeared, debts became uncertain, and families could no longer trust the value of what they had earned. James Madison wrote in Federalist No. 44 about what he called the pestilent effects of paper money. His concern was not simply that prices might increase, he believed unstable money could interfere with contracts, transfer wealth unfairly, and undermine confidence in Republican government. From that perspective, the founders would probably view sustained inflation as a form of government failure. When the value of money declines, a worker's paycheck buys less, a senior's savings lose purchasing power. A veteran living on a fixed income becomes poorer without Congress ever voting to reduce that veteran's benefits. That is why inflation is sometimes described as a hidden tax. Nobody sends you a tax bill, but the dollars you already possess become less valuable. The second founding principle was fiscal responsibility. George Washington stated it clearly in his farewell address. Cherish public credit. One method of preserving it is to use it as sparingly as possible. He also warned against accumulating unnecessary debt and placing burdens on future generations that the present generation should bear itself. Washington understood that emergencies and wars might require borrowing. What he opposed was treating debt as though it carried no consequences. Alexander Hamilton had a somewhat different economic philosophy, but even Hamilton did not support unlimited borrowing. Hamilton believed responsible debt could help establish national credit, finance genuine national needs, and strengthen the economy. But he also wrote that the creation of debt should always be accompanied with the means of extinguishment. In modern language, if government borrows money, it should know why it is borrowing, how the money will be used, and how the debt will eventually be repaid. That sounds obvious because it is obvious. Yet borrowed federal dollars are sometimes treated like free samples at a warehouse store. Grab another one, keep walking, and try not to think about who paid for it. So you may be asking yourself, what do the founders have to do with today's inflation, and what were they trying to warn us about? They were not predicting the consumer price index, modern central banking, or the price of eggs. They were warning us that government cannot exercise enormous power without creating real consequences. When Washington spends more than it collects, repeatedly borrows money, increases demand without increasing the supply of goods and services, or adopts policies that make energy, transportation, housing, and production more expensive, those costs eventually reach the American people. Not every deficit automatically causes inflation, and Congress is not the only factor. Federal Reserve policy, supply chain disruptions, energy prices, labor shortages, wars, and other global events also play a role. But the founder's central warning still applies. Government cannot spend, borrow, regulate, or create money without economic consequences. Somebody eventually pays through higher taxes, rising prices, increased interest payments, slower economic growth or debt pass to the next generation. The bill always arrives. Washington's favorite trick is making sure it arrives after the election. They would ask, did Congress exercise its power responsibly? Was the spending authorized by law? Was the public given an honest accounting? Were short-term political benefits purchased by creating long-term obligations? Then were the people's representatives held accountable? If the federal budget were a family checkbook, the bank would not send a friendly reminder. It would call in the tone normally reserved for emergencies and ask whether an adult was available. The fourth principle was the protection of property and contracts. Inflation changes the real value of wages, savings, loans, pensions, and contracts. A person may receive the exact number of dollars promised and still receive less actual value. The founders understood that a free economy depends on people trusting contracts and believing that the rules will not be manipulated after an agreement is made. Finally, the founders would likely reject the idea that government can create prosperity simply by creating more money or debt. Real prosperity comes from productive work, agriculture, manufacturing, commerce, innovation, energy, investment, and the creation of goods and services people need. Money represents value. It does not create that value by itself. The founders would certainly disagree over the specific solutions to today's inflation, but I believe they would agree on the central warning. A republic cannot remain economically free if its government destroys confidence in its money, spends without discipline, conceals the real cost of its decisions, or continually transfers its obligations to future generations. The founding principle is not that government must never borrow. The principle is that government must borrow lawfully, spend responsibly, protect the value of citizens' labor and property, and remain accountable to the people who will ultimately pay the

Practical Policy Steps For Relief

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bill. First, Washington must take the national debt and annual deficits seriously. And by seriously, I do not mean holding another hearing entitled, How many times can we move the decimal point before the public notices? Benjamin Franklin put it more simply, he that goes a borrowing goes a sorrowing. Apparently, Franklin had already seen a modern federal budget. That does not mean recklessly shutting down essential programs overnight. It means establishing enforceable spending priorities, eliminating waste, measuring whether programs produce results, and ending the habit of funding every problem with borrowed money. Second, the country needs a reliable energy strategy. We need sufficient domestic production, refining capacity, pipelines, transmission infrastructure, storage, and a diverse energy portfolio. Energy security is economic security. Third, federal and state governments should review tariffs and regulations that increase the cost of essential inputs without producing a clear national benefit. Fourth, Arizona must increase the supply of attainable housing. That means improving permitting, addressing infrastructure shortages, supporting skilled construction workers, and working with local governments without ignoring local control. Fifth, tax relief should be targeted and fiscally responsible. Temporary rebates may provide short-term relief, but they do not fix the underlying supply problems. Permanent commitments should not be built on temporary revenue. A temporary rebate during sustained inflation can feel like handing a family an ice cube while the kitchen is on fire. They will take it, and they should, but let us not pretend we repaired the stove. Finally, government must stop hiding behind averages. Rural families, seniors living on fixed incomes, veterans, working parents, small businesses, and young adults trying to purchase their first home experience inflation differently. Public policy must recognize those differences. The June report gave us some good news. Monthly inflation declined, core inflation moderated, and shelter costs showed signs of slowing, but we should not declare victory. Prices are still approximately 28% higher than they were in early 2021. Arizona gasoline is averaging approximately $4.44 per gallon. Mortgage rates remain above 6.5%. Producer prices are elevated, and workers' purchasing power barely improved over the past year. The honest conclusion is this inflation is cooling in some areas, but affordability remains a crisis. The goal should not be to make one political party look good or bad. The goal should be to restore purchasing power, increase supply, protect taxpayers, strengthen American energy security, and make it possible for working families to get

Your Biggest Bill Plus Closing

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ahead again. I want to hear from you what expense has increased the most in your household? Groceries, gasoline, utilities, insurance, rent, or your mortgage? Send us your answer and tell us what inflation looks like, where you live. And as we close, remember that the conversation does not have to end here. Search for the Walt Blackman Show on Apple Podcasts, Spotify, Amazon Music, iHeartRadio, YouTube Music, Pandora, Podcast Addict, Player FM, or wherever you listen to podcasts. You can find every episode and the show archives at the Walt Blackman Show.buzzsprout.com. You can also watch our live broadcasts and follow me online. Facebook, Walt Blackman, YouTube, The Walt Blackman Show, X at Blackman4AZ, Instagram at Walt4AZLD7, TikTok at Walt Blackman1. Please follow, like, and share the show. Send this episode to your friends, family, and anyone who believes that facts matter, freedom requires responsibility, and the Constitution is still worth defending. Leave a review and let me know what you think. Every follow, every like, and every share helps us expand the conversation and reach Americans who want more than political slogans and manufactured outrage. Thanks for listening. God bless you, God bless Arizona. I'm Walt Blackman, and this is the Walt Blackman Show. Until next time, keep the faith, keep your integrity, and keep the Republic.