Since 1996, the Federal Reserve has oriented its monetary policy around maintaining 2% inflation annually and, for the most part, U.S. inflation over the past couple of decades has typically hovered within a percentage point or two of that target but, right now, most price categories are exceeding that, some quite dramatically. Here’s how various categories of consumer spending have fared over the past 12 months:
This post by Lorimer Wilson, Managing Editor of munKNEE.com, is an edited ([ ]) and abridged (…) excerpt from an article by Nick Routley of visualcapitalist.com
Top Five Areas Where Consumers Plan to Cut Back On Their Spending
Rising prices inevitably impact the economy as consumers adjust their buying habits…:
|MONEY SAVING ACTION||% OF RESPONDENTS|
|Cut back on restaurant / take-out meals||48%|
|Keep my current technology (e.g. phone, tablet) instead of upgrading||30%|
|Budget food and cut back on grocery buying||29%|
|Purchase less clothing / accessories||29%|
|Put off home repairs, renovations, or home upgrades||23%|
Will Inflation Continue to Rise in 2022?
…Improved semiconductor supply and an easing of port congestion around the world could help slow inflation down if nothing goes seriously wrong. That said, if the last few years are any indication, unexpected events could shift the situation at any time. For the near term, consumers will need to adjust to the sticker shock.
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