Americans Continue to Feel Financial Strain Even as Inflation Cools

[bjl584]

Why more Americans are struggling even as inflation cools (cnbc.com)

[ua_guy]

Yep. And I see people beating political drums saying a different party will make everything cheap again and it's just not true except under one circumstance which is true when any party is in power: The economy experiences a recession. Only then some prices may fall, along with the cost of borrowing. But while it's still doing well, maintaining growth, prices aren't going to roll back and interest rates will stay high. Just like the article says, cooling inflation does not mean falling prices. Prices remain high. And any kind of manufactured relief will make prices worse.

[disneysteve]

People, and the media, can’t seem to comprehend what inflation means. It does not just refer to prices rising. It refers to the rate at which prices are rising. With rare exception prices are always rising. When inflation is low (2-3%) prices rise slowly. When inflation is high (9-10%) they rise quickly, which is more noticeable. When we drop from a period of high inflation to low inflation, prices don’t drop. They just stop rising as quickly.

[Fishindude77]

I don't look for prices on much of anything to go down, but it sure would be nice if the escalation slowed considerably.

[james.hendrickson]

To add to this, I'm posting the definition of inflation for all the lurkers.

Per websters, inflation is defined as:

: a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services.

[disneysteve]

I don't look for prices on much of anything to go down, but it sure would be nice if the escalation slowed considerably.

And it has. It has dropped from around 10% back close to the 3% target. Some prices have dropped like eggs and milk and some other things. Gas is pretty reasonable back around $3.30 here. But many companies are maintaining higher prices because it’s generating record profits so they have no incentive to lower them even though there’s no economic reason for them to be so high.

[LivingAlmostLarge]

Oh you can feel it in the portions of everything.

[Fishindude77]

Breakfast yesterday for two of us was $41, nothing fancy and not a fancy place. That's what it costs these days in rather low cost of living area(s).
This traditionally was the cheap meal that many at all levels of income enjoyed going out for several times per week. I don't see the volume of business in these places anymore.

The rate of inflation may have slowed for a couple months, but it went up so rapidly for so many months a lot of damage has been done. Many business have spent their reserves and won't survive, and many individuals are in worse financial shape than they were a few years ago.
I blame the majority of it on runaway government spending, funding all these wars and all the free money that got handed out during Covid being major contributors.

[ua_guy]

Maybe going out to breakfast shouldn't be so commonplace. People can eat oatmeal at home for much less. Or skip breakfast, I mean, do we really need to eat 3 times per day?

Not sure I see any relief in sight, not with proposed tariffs on everything which will raise prices even more, and then if somehow republicans get back in power, we know they add record numbers to the federal deficit and hand out free money like the CARES act and all the Covid relief. Those millionaires sure needed some scratch during covid and they got it...for free.

[myrdale]

Maybe going out to breakfast shouldn't be so commonplace. People can eat oatmeal at home for much less. Or skip breakfast, I mean, do we really need to eat 3 times per day?

Who needs more than one loaf of bread a week; because that is all they are going to get in the food lines if the economy keeps it up!

Overall grocery bills are something like 40% higher than they were four years ago. Even if inflation is ONLY 1% right now, that is 1% on top of 40%. Housing and insurance prices have sky rocketed over that same time period. Utilities are jumped as well. It is absolutely wrecking people financially.

Hopefully the situation is going to be changing in the near future, but even then it is going to take a bit to get this economy out of the ditch it's been plowed into.

[ua_guy]

Who needs more than one loaf of bread a week; because that is all they are going to get in the food lines if the economy keeps it up!

Overall grocery bills are something like 40% higher than they were four years ago. Even if inflation is ONLY 1% right now, that is 1% on top of 40%. Housing and insurance prices have sky rocketed over that same time period. Utilities are jumped as well. It is absolutely wrecking people financially.

Hopefully the situation is going to be changing in the near future, but even then it is going to take a bit to get this economy out of the ditch it's been plowed into.

I agree, 7.8 trillion added to the deficit and all the free money given out under the previous administration did no good. Inflation spiraled out of control, and it's just starting to tamp down 3 years later. These things take time to heal but the economic policies, stability, and the metered actions of the Fed appear to have landed us in the right place.

[myrdale]

When prices drop 50% we will be in the right place.

[ua_guy]

When prices drop 50% we will be in the right place.

And when will that be? What, other than a total economic crash, will causes "prices" to drop by 50%? I think we'd all love to hear your explanation. And by prices, I mean everything: housing, energy, food, all consumer goods, everything.