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Go here to link your subscription. To learn more or opt-out, read our Cookie Policy. How to think about rising prices, explained by an economist who thinks about this all the time.
The consumer price index, which measures what consumers pay for goods and services, rose by 6. Over the course of the month, prices crept up by 0. The data shows prices are up almost everywhere, including gasoline, energy, shelter, food, and new and used cars and trucks. Among the few price indexes to decline were airline fares and alcoholic beverages. Regardless of what the experts say, for regular people, the economic landscape can be a little nerve-wracking, especially when it comes to prices.
Inflation makes people feel bad about the economy, even when there is plenty to feel good about , too. I reached out to Claudia Sahm, a senior fellow at the Jain Family Institute and former Federal Reserve economist, to ask how to parse the latest inflation numbers. However, Sahm notes, the economic situation — and pandemic situation — is much better for many people this year than it was last.
Prices really across the board — with some exceptions — rose in October. The increase that we saw in total aggregate prices was as large as the big increases that we saw early in the summer. What had happened between, say, June and October was that the level of prices had stayed high. But this is a step backward.
Inflation moved back up, so that means off of the high level of prices, we have moved up, again, pretty notably.
Is there a broader context you think people should pay attention to here? There are good reasons that inflation comes down, like we start working out supply chains and labor shortages. And there are bad reasons, and my bad case is Covid comes back and we get scared and pull back. Prices are supply and demand. Covid has been the root of all evil through this entire pandemic.
It comes, slows some, then it comes back with a surge, then it slows, then it comes back with a surge. We are pointed in the right direction, particularly after the vaccines came out, but not every month. People are exhausted. Workers, businesses are exhausted. We are moving in the right direction, but it is painful. One of the pain points is higher prices. Another big pain point is not having a job. Inflation is felt more broadly because the unemployment rate is back down. Far fewer people are in these dire straits than were happening earlier in the pandemic, but everybody is facing some price increases.
Inflation has both a reality and a life of its own. Both because jobs have been coming back and also because the federal government put out a lot of economic relief, people — especially those who are at the very top of the heap — have, on average, enough money to pay those extra prices in the majority of cases. And if you look at the consumption numbers adjusted for inflation, these things have gone up, and that is because people have more money.
Prices are rising, but their bank accounts rose faster. Thus, you're getting more than just security from these safe dividend stocks. October 22, Financial Planning. October 29, Kiplinger's Economic Outlooks. November 8, Depending on your income, President Biden's "Build Back Better" plan could boost or cut your future tax bills if passed.
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