Inflation creeps despite drop in gas prices | News, Sports, Jobs – Minot Daily News

Sep 14, 2022
At the beginning of the summer, experts predicted $6 prices nationally for a gallon of gas as the economy visibly found itself in the grips of inflation. While current prices have thankfully avoided making those predictions true, according to the latest Consumer Price index report, inflation doesn’t appear to be going anywhere but up.
The CPI report released Sept. 13 showed that inflation continued to rise in August, hitting 8.3% compared to a year ago. Despite interest rate increases from policymakers at the Federal Reserve to dampen inflation, economists are saying the data indicates that inflation is now appearing to affect other areas of the economy.
When inflation first started rearing its head in 2021, it was primarily felt in commodities and goods affected by supply chain disruption and rising consumer demands. Despite 91 straight days of dropping fuel prices, grocery prices continue to creep up by 0.7% in August and 11.4% more than the year before.
The CPI shows a 6.3% increase in consumer prices even if the prices of food and fuel are excluded from the data, offsetting whatever relief the decrease in fuel costs was providing. The cost of everything from rent, healthcare and other service sector prices have notably risen, driven by increased wages and a humming jobs market.
The Fed’s rate increases may also be playing a part. Higher interest rates may have been implemented to slow down the economy, but make it harder for people to purchase homes, increasing demand for rental units. The Department of Labor shows that rent has risen 6.7% in the last year, a pace not seen since the economic downturn of the 1980s. Rent prices are also affected by increases in wages, which some employers have increased out of necessity to attract new hires and retain employees in the midst of the “Great Resignation.”
In a webinar hosted by the Council of Foreign Relations, CFR fellow Zongyuan Zoe Liu discussed the CPI, saying that simply looking at the macroeconomic data may not paint the full picture of what it is like to endure it on a day-to-day basis.
“The CPI is a basket of stuff. It may not necessarily be the same basket for everyone,” Liu said, pointing out that the rapid inflation will be more acutely felt by the working poor or those with fixed incomes than those who can absorb the rising costs of goods and services.
Economists expect the Fed to address the data from the report by possibly increasing interest rates even further. That no doubt was on the minds of investors on Wall Street, which saw markets plunge and fluctuate in response. Whatever the actions taken by lawmakers, the takeaway from experts on the CPI indicates that consumers have been able to bear the brunt of inflations bite so far. The question that many are beginning to ask is how much longer they will be able to do so.
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