Is that because of the current 2.4% inflation, or the previous much worse inflation.
2.4% is .4% over the fed goal. Not great, but in the ballpark.
I admit my inflation odometer is off. I was raised in a multi-generational house. My grandparents in the 60s always complained about the cost of things. They recalled when they could buy a gallon of milk for a nickel. This led me to a "that's what old people do" belief: They complain things don't cost what they did 50 years ago.
We have a price point in our mind, even if we have 5 years of no inflation we are going to recall the days we could get the Big Mac combo for under $10. It is etched.
I also know this is has a massive variability, but from
Statistica:
In August 2024, inflation amounted to 2.5 percent, while wages grew by 4.6 percent. The inflation rate has not exceeded the rate of wage growth since January 2023.
Bolding is theirs. That is wage growth, so it is at least people working and not a generic income which would include the investor class. So some people are doing better, and some are doing worse. That is pretty standard in recoveries. But 18 months of wages outpacing inflation is pretty good. You can see the chart at the link, overall wages have largely done a good amount better than inflation.
And yes, that is going to be uneven. To be honest, my wages sure aren't doing better than inflation. Some people are doing quite well, many of them working class. UPS drivers, and longshoremen will be soon, travel nurses, and UAW workers. Those aren't CEOs.
And the hardest hit will be people on fixed income, as social security may go up but if they have an investment they draw from to supplement, it isn't like they can raise it from a 4% withdraw to a 7% and hope to have it last.
Getting it back under 2% is important. But the inflation people are mad at is not the .4% over. That adds 4 cents to a $10.00 Big Mac combo meal. It is the inflation that was 8%. Our view of inflation is a lagging indicator.
