Quite a few European nations are against surrogate motherhood
The cost of essential spending has increased exponentially since 2020. If your paycheck isn't going as far as it used to, it's for a number of reasons. The pandemic caused a market crisis, which saw the cost of goods and services rise. Then the labor market tightened as people left their jobs, which saw wages increase. Supply chain shortages occurred because of the pandemic, and when restrictions were lifted the supply of goods couldn't keep up with demand. That was before the Russian invasion of Ukraine affected fuel and food prices globally, or considering that extreme weather events have had knock-on effects for the supply of certain foods, driving prices upwards again.
With all that in the mix, you'd be forgiven for wondering if the end is in sight. With this in mind, click on to discover if prices are going to stay high for the foreseeable future.
The prices of basic goods have been high for a while now. You're not alone if you've walked out of the grocery store a bit confused about the price you paid versus how light your bags are!
The Federal Reserve pays close attention to core PCE (personal consumption expenditure) inflation, which measures changes in consumer spending on typical goods and services.
Inflation is a change in the levels of prices, over a period of time. The Federal Reserve’s preferred measure for the price level is the PCE price index, as published by the BEA (Bureau for Economic Analysis).
This inflation excludes the contribution of food and energy prices. These are seen as very volatile and mostly determined by external factors.
However, recent experience and some research have cast doubt on how appropriate it is to exclude food from this measure of inflation.
From mid-2021 and all throughout 2022, inflation peaked and, with it, the price of goods soared. Many blamed the aftereffects of the pandemic and the war in Ukraine for rising prices.
Inflation went down in October 2023 year-over-year from a rate of 3.7% to 3.2%, according to the consumer price index (CPI) report released in November 2023.
The CPI is a basket of goods and services that consumers typically buy. The contents in the basket are fixed, so changes only reflect the differences in prices over time.
As of November 2023, the rate of inflation may be reducing overall, but the price of goods continues to remain high. It doesn't seem like that's going to change anytime soon.
While the rate that these prices are increasing has slowed, they're not declining. In most cases, prices won't go back to what they were before 2021.
The Federal Reserve's inflation target is 2% over the long term. It's not expected for inflation to reach that level again until 2026.
As interest rates have been increased to offset the effect of inflation, it also means buying a house or car, or paying your credit card bill, has become more expensive.
Weather can also drive up food prices, and extreme weather conditions are becoming more common. Heat waves destroy crops, threatening to drive up food prices.
Prolonged droughts and regional conflicts can have global effects, as was seen with the war in Ukraine. Climate change is increasing the chances of swings in food prices in the future.
The El Niño weather pattern tends to raise temperatures and bring more extreme weather conditions. It means that over the next few years goods including sugar, cocoa, coffee, and grains are at risk of higher prices if supplies reduce.
The prices of some goods have already stabilized, e.g. eggs, in comparison to the highs of 2022 and early 2023.
Falling prices are not necessarily a good thing. "Deflation" can have a negative effect on the economy, causing higher unemployment if companies lay people off due to falling profits.
Deflation is also negative for people with mortgages, because the fixed amount they have to pay back remains the same. If prices are falling, the mortgage becomes a bigger burden.
Wage growth lagged behind inflation for many of the past few years. This meant although people may have gotten a raise at work, the speed of price increases meant they didn't notice a difference in their disposable income.
In 2023, wages began to outpace inflation again. Many individuals, however, don't believe their wages will keep up with the rate of inflation.
As higher inflation is not going away in the short to medium term, it's worth learning about the basics of it, so you can understand what it will mean for you.
"Fiat money" is money that isn't redeemable against something of material value, like gold. Fiat inflation erodes a currency's purchasing power. It does this by putting more money into circulation than is needed for basic growth.
Fiat inflation is achieved by bank lending or central bank actions, with the logic being more money = more buying = more economic growth. However, prices soon rise under this model.
The problem with fiat money inflation is that not everyone gets the income boost that's needed to financially cope amid rising prices.
Have a look at your spending and the groceries you buy, and adjust to reflect the changes in prices. Reprioritize where your money is going and cut back where you can, to add to your rainy day fund.
Continue putting as much as you possibly can into your savings each month. This could mean cutting back on non-essential items when prices are higher. Saving is a habit: it's easier to do it if you don't stop. Keep working towards your goals.
Day-trip destinations in your area, visits to local beaches or lakes, national parks, natural landmarks, or amusement parks are alternatives to spending on a bigger holiday. Enjoy time with friends and family without having to worry on your return.
Continually reassess your financial goals according to the inflationary climate. You may need to push back on some things, but don't be disheartened. You are still working towards your goals, albeit at a temporarily slower pace.
Cash back and rewards cards can help you save on every purchase that you make. Some providers let you earn cashback on debit purchases.
Sources: (Vox) (CNBC) (Forbes) (Barron's) (Affinity Federal Credit Union)
Tricks to cope with inflation
The cost of basic goods remains high
LIFESTYLE Us inflation
The cost of essential spending has increased exponentially since 2020. If your paycheck isn't going as far as it used to, it's for a number of reasons. The pandemic caused a market crisis, which saw the cost of goods and services rise. Then the labor market tightened as people left their jobs, which saw wages increase. Supply chain shortages occurred because of the pandemic, and when restrictions were lifted the supply of goods couldn't keep up with demand. That was before the Russian invasion of Ukraine affected fuel and food prices globally, or considering that extreme weather events have had knock-on effects for the supply of certain foods, driving prices upwards again.
With all that in the mix, you'd be forgiven for wondering if the end is in sight. With this in mind, click on to discover if prices are going to stay high for the foreseeable future.