Why is the drop in inflation not being felt?

The inflation rate has fallen by 6.1% since June 2022, but prices have continued to rise slowly.

Published by

20 de julio, 2023

Topics:

inflation

"Prices continue to rise. They are simply rising at a slower rate." These were the words with which business journalist Brian Cheung tried to explain how the new inflation figures (which were recorded at 3%) are not reflected in the pockets of Americans.

Despite the fact that inflation has fallen in a matter of a year (in June 2022, it reached a maximum of 9.1%), citizens still do not perceive relief in their bank accounts. Some surveys show that today, the majority of Americans do not feel financially secure.

To explain this phenomenon, Cheung commented on “MTP Now” on NBC News, the Bureau of Labor Statistics’ figure, which shows a 6.1% drop from last year, is not necessarily a demonstration of improvement in prices or citizens' bills:

Prices continue to rise. They are simply rising at a slower rate, which means that some things are getting cheaper, while others are still getting more expensive.

Cheung gave as an example that the cost of some products such as eggs, milk and gasoline has gone down. Meanwhile, others, such as bread, have increased since June 2022. However, the financial specialist exposed that since Biden's inauguration, prices in all categories have increased, comparing it even to the pandemic or the Trump administration:

But if we now take a look at January 2021, Joe Biden's inauguration... you can see the prices of all these categories are still higher than they were at that time. Now, it is also arguably higher than before the pandemic during the Trump administration.

NBC commentator Chuck Todd shared the same idea as Cheung and added that the inflation data does not reflect that "prices have somehow fallen below where they were."

The good news is that prices are rising more slowly. This does not mean that prices have somehow fallen below where they were, say, two years ago at this time.