Dramatic shift comes after more than two years of high rates helped tame inflation but that also made borrowing painfully expensive for American consumers
Inflation is the overall increase in prices. If I inflate a tire at 10 PSI/sec and then I slow the inflation to 5 PSI/sec, the tire is still inflating. Saying prices have not fallen is a given since that has not really happened since the Great Depression. If the Fed kept interest rates high despite lowering inflation we eventually would have gotten deflation which is something we absolutely, positively do not want. Wage increases have outpaced price inflation since early 2023. Inflation was greater than wage growth in 2021 and 2022 so your experience sucks but it doesn’t seem to be the norm.
That data is made of averages which aren’t worth a lot when you discuss people’s feelings about the economy, and also not everyone is getting a raise equally. Many don’t get one at all and those people are definitely still dealing with prices being higher.
Additionally, the cumulative rate of inflation over the last four years is over 20%, so unless my annual salary rises to be at least that much higer than it was four years ago then my real buying power has still decreased. It doesn’t matter that the average raise is outpacing inflation if I never receive enough raises to at least keep up.
States with laws that are hostile to workers - as mine is - make it hard to find employment where your employer will increase your pay to at least track inflation. This kind of thing gets lost in the discussion of averages.
The comment on this article that you were originally responding to was most certainly one of frustration. I feel that frustration too. Just because a person might have a wealthy neighbor while they live in poverty doesn’t really mean that, on average, everyone is doing fine. It still means some are still hurting.
Inflation is the overall increase in prices. If I inflate a tire at 10 PSI/sec and then I slow the inflation to 5 PSI/sec, the tire is still inflating. Saying prices have not fallen is a given since that has not really happened since the Great Depression. If the Fed kept interest rates high despite lowering inflation we eventually would have gotten deflation which is something we absolutely, positively do not want. Wage increases have outpaced price inflation since early 2023. Inflation was greater than wage growth in 2021 and 2022 so your experience sucks but it doesn’t seem to be the norm.
That data is made of averages which aren’t worth a lot when you discuss people’s feelings about the economy, and also not everyone is getting a raise equally. Many don’t get one at all and those people are definitely still dealing with prices being higher.
Additionally, the cumulative rate of inflation over the last four years is over 20%, so unless my annual salary rises to be at least that much higer than it was four years ago then my real buying power has still decreased. It doesn’t matter that the average raise is outpacing inflation if I never receive enough raises to at least keep up.
States with laws that are hostile to workers - as mine is - make it hard to find employment where your employer will increase your pay to at least track inflation. This kind of thing gets lost in the discussion of averages.
The comment on this article that you were originally responding to was most certainly one of frustration. I feel that frustration too. Just because a person might have a wealthy neighbor while they live in poverty doesn’t really mean that, on average, everyone is doing fine. It still means some are still hurting.
I have an B.S. in Economics, by the way.