The cost of living in the United States is continuously rising, despite the fact that the torrid inflation may finally be beginning to moderate. The Labor Department announced this week that consumer prices increased 8.5% last month compared to the same period the previous year. Even if that number may be lower than analysts had anticipated, it nevertheless represents more pressure on household budgets.
How much has inflation actually reduced our purchasing power this year? Using an internet inflation calculator, it was discovered that a dollar today is equivalent to around 86% of what it was three years ago. Accordingly, a product that cost $100 in 2019 would cost $115 in the present.
In more concrete words, it means if you spend $100 on brunch with a friend in 2022, you’ll get one fewer mimosa, or around $15 less than you would have in 2019. Even further in the past, $100 worth of expenditures in 2000 would currently cost $172. At today’s pricing, a $100 shopping spree from 1980 would cost you a whooping $359.
Undoubtedly, some degree of inflation is a normal component of economic expansion.
According to Errol Barnett of CBS News, “the United States faces inflation almost every year and has done so since the 1950s.” “Therefore, it is expected that the value of the dollar has declined over time.”
The current extreme pace of inflation, which is more than four times the Fed’s yearly target of 2%, is out of the ordinary. “Wages are not also continually increasing to meet the reality that products are more expensive,” Barnett continued.
He remarked, “We’re actually observing that more money is going out of our bank accounts than coming in.”