Inflation, which is currently more than three times higher than it was last year, is making everything more pricey.

Inflation may not feel good, but economists say most Americans are withstanding it. 
Pandemic savings remain solid, jobs are plentiful, and workers have the power to bargain for higher wages.
One soft spot is an increase in debt, but economists say it’s temporary and to be expected.

Prices at the grocery store are higher, you’re putting more purchases on the credit card, and it costs more to fill up your car.

Inflation may not feel good, but economists told Insider, there’s no need to panic — for now.

“People are noticing the higher prices, and that in many cases, their wages aren’t keeping up,” Tara Sinclair, an economics professor at George Washington University, told Insider. She explained it’s the seesaw between rising wages accompanied by rising prices that’s so confusing. 

It’s probably why US consumer confidence is going down, but the overall data shows Americans’ finances are actually keeping up. For one, there are plenty of jobs to go around, Americans are still spending, and the savings amassed during the pandemic is still helping to keep the economy afloat.

Inflation is hitting Americans where it hurts the most

On paper, it looks good that wages are going up. In response to a historic labor shortage, employers are attempt to lure in workers who are holding out for higher pay, safer working conditions, and more fulfilling careers, among other factors. 

But skyrocketing wages aren’t keeping up with skyrocketing inflation, which means that effectively, Americans are losing money.  

Average hourly earnings increased to $31.73 per hour in March, according to data from the Bureau of Labor Statistics, a 5.6% increase from the year before. But inflation rose at a rate of well over 8% at the same time, according to the Consumer Price Index. That means Americans took a pay cut, according to seasonally adjusted data published by the Labor Department. 

Plus, higher prices are hitting some of the products Americans need the most: Car prices, for both used and new, grown exorbitantly before supply-chain troubles began to ease. This year, grocery prices are predicted to increase between 5% and 6% percent, while prices to eat out are predicted to increase between 5% and 6.5%, the United States Department of Agriculture said in a recent report. 

On top of that, the US Census Bureau’s most …read more

Source:: Business Insider

      

Why you feel like the economy is crappy even though it’s not

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