Kerby Anderson
Is inflation decreasing? You have probably been hearing, as I have, that inflation is going down. But that is why you should be skeptical when you hear such claims. It would be accurate to say that the rate of inflation is going down, but inflation itself is increasing.
We can all probably remember when the inflation rate peaked at over 9 percent. Now the inflation rate is one-third of that percentage. But that still means that prices are going up based on the consumer price index, which, as I have explained in previous commentaries, isn’t the most accurate measure of inflation.
Here is another way to look at the inflation trend. The annual rate in 2021 was 7 percent, it was 6.5 percent in 2022, and last year it was 3.5 percent. If you run the numbers, that means that average prices have risen 17 percent over the three-year period.
Of course, you don’t need all these numbers to know that inflation is still a reality in your world. I have a friend who tracks rising prices and inflation by recording the cost of bananas. I know of a YouTube producer who often uses the rising price of a Big Mac to illustrate inflation.
There has also been misinformation about the impact of inflation. A few years ago, I began to collect articles telling all of us that inflation is good. I have one article with the title “Inflation is Good for You” and a CNN article with the title “Why Inflation Can Actually be Good for Everyday Americans and Bad for Rich People.” Their argument is that inflation favors debtors. While that is true, any small benefit is offset by rising prices at the gas pump and grocery store.
Once again, we should be skeptical when politicians and the media misinform us about the rate of inflation and its impact on our lives.