Inflation remains the biggest threat to our economy’s recover from the pandemic. We talk about it a lot, and for good reason. The current rate of inflation has made the cost of living considerably harder for the average person, especially for retired seniors. CNBC’s Jeff Cox reports on the current rate of inflation and how it compares to what was predicted.
The Current Rate
The current rate of inflation is 8.3 percent, which is a record 40 year high. The Fed predicted that the March and April inflation rate would be around 8.1 percent. That is a close estimate but is still higher than experts would prefer. When the rate is higher than expected, it will ultimately take the Fed’s interest rate plan to take longer to reduce inflation overall.
The Consumer Price Index (CPI), the matrix used to keep an eye on the general costs of goods and services, has been the main indicator to understand the state of inflation. The CPI breaks down the increases of main economic goods. Prices for new cars increased 22.7 percent and used cars 13.2 percent. Certain grocery items increased between 3.4 and 10.3 percent. Energy and gas prices proved to be volatile but have since dropped an estimated 2.7 percent.
Understanding the Situation
The Fed is working to slow inflation, though many believe that the fight will be longer than they thought. Some economists have thrown around “stagflation,” which is a term that refers to stubborn inflation and low GDP. Whether our economy is stagnated remains to be seen, but the fact is that inflation has taken loner to deal with than anyone originally anticipated.
Seniors need to prepare for the long term. With consistently heightened inflation, comes increased COLA benefits. However, it can also mean extended financial strain on every other asset or resource set aside for retirement. Get creative with your savings and income, and prioritize saving over spending.
The Council for Retirement Security works to safeguard the Social Security Trust, so in times like these, we don’t have to fret over our benefits. Join in the Council’s fight so you can protect your benefits against the current rate of inflation.