Prices On Everything Are Rising Faster Than They Have Over The Last Four Decades, But Is The End In Sight For The Near Future?

fizkes - stock.adobe.com - illustrative purpose only, not the actual person
fizkes - stock.adobe.com - illustrative purpose only, not the actual person

Every time you visit the grocery store, stop at the gas station or pay a utility bill, each dollar you spend is only worth eighty-nine cents.

This eleven-cent disparity is a result of raging inflation that is still running rampant throughout the United States– making the state of the American economy a primary concern among citizens.

According to the U.S. Bureau of Labor Statistics’ latest July report, the inflation rate has risen to 8.5%– the highest it has been since the severe recession of the early 1980s.

Now, consumers are paying 15.2% more for electricity– the largest twelve-month increase since February of 2006.

Housing costs have also risen 5.7% over the last year; meanwhile, the cost of groceries has increased 13.1%.

And one of the most widely sought-after commodities, gasoline, has witnessed price gauges soaring 44% above last year’s gas station costs.

These steep increases have pushed employers to hike up workers’ pay at a quickening pace. But, even the salary bumps have not been enough for many Americans to weather this financial storm.

According to the U.S. Bureau of Labor Statistics Employment Cost Index, the wages and salaries of civilian workers rose 1.4% during the second quarter and 5.3% over the entire year– which ended in June.

And while this twelve-month salary surge is the highest jump workers have seen since 1983, the increases have fallen short.

fizkes – stock.adobe.com – illustrative purpose only, not the actual person

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In fact, if you account for the rising cost of living, the wages and salaries gap has actually increased by 3.5%. Jason Furman, a Harvard University economics professor, detailed how now, Americans are left playing catch up.

“They are falling behind– not because wage growth is slowing, but because price growth is so high. And that’s a worrisome sign for the future,” Furman said in an interview with CNN.

Still, some economists believe that citizens just need to hold on and look forward to 2024–  when inflation rates are expected to slow to a target rate of 2%.

Others are not as optimistic but are still forecasting inflation to hover between 3% and 4% over the next few decades– which is still elevated but at least half of what Americans are experiencing right now.

So, it is not yet time to worry about extreme cases of hyperinflation occurring in the United States as it has in Germany and Venezuela in the past.

Instead, financial advisors have instructed citizens to sit tight and take a few crucial steps.

First, continue to be wary of overspending and prioritize living within your means. Second, ensure that you have an emergency fund equipped to cover three to six months of living expenses in the event of an emergency. And finally, keep in mind that economic cycles are bound to happen.

To view the latest Consumer Price Index data, visit the link here. Or, to view the latest Employment Cost Index Data Summary, visit the link here.

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