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Red-hot inflation may finally be showing signs of cooling, but around the U.S. the cost of living is still soaring. Consumer prices last month rose 8.5% from the same time a year ago, the Labor Department reported last week. While that figure may be lower than economists expected, it represents yet another turn of the screw for household budgets.
Exactly how much has our spending power been diminished by inflation this year? These days, a dollar is worth about 86% of its value three years ago, according to an online inflation calculator. That means an item that cost $100 in 2019 would cost $115 today.
In more tangible terms, that means spending $100 on brunch with a friend in 2022 will get you one less mimosa, or the equivalent of about $15 less than it did in 2019. Going back even further, $100 worth of spending in the year 2000 would now cost $172. A $100 shopping spree in 1980 would set you back a whopping $359 at today’s prices.
To be sure, a certain level of inflation is a natural part of economic growth.
“The U.S. experiences inflation nearly every year, and has done so since the 1950s,” CBS News’ Errol Barnett said. “So, it’s normal that the dollar has decreased in value over time.”
What’s not normal is the currently excessive rate of inflation, which is more than quadruple the Fed’s annual target of 2%. The issue, Barnett added, is that “wages are not also consistently increasing to accommodate the fact that things are more expensive.”
“We really are noticing that more money is leaving our bank accounts than coming into it,” he said.
Source: CBS
