Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
That 3.7% is nearly twice the target of 2%. And, you're somewhat correct, 3.7% isn't unmanageable. But it followed a year or so of over 10% which skyrocketed prices.
I was an adult the last time we had those rates of inflation forty years ago. The Greatest Generation loved it, their CDs were making serious money for them. The rest of us watching industries collapse, car loans hit 20%, mortgage rates hit 15% and unemployment go to 14%, not so much.
Even this many years later the effects of those few years still are working their way through the economy and society.
I don't dispute it would be best if inflation were in the 2% range. Two percent range to me is 2 to 3%. At the outside of that range (2.9%) we are only off target by .8%. I always felt it was unrealistic to have perpetual mortgage rates at 3.75% to 4.00%. Those low mortgage rates are part of the reason that housing prices are so expensive (caused by speculators who were driven by those low interest rates).
The drop in inflation from 9% to 3.7% in a short period is an achievement. I only give part of the credit to the Fed for that. I think most of the decrease is due to the way the private sector responded to supply chain issues and solved the problem of shortages on their own.
I agree we have a problem with inflation, but having been a young adult in 1978 I can tell you that today the problem is much less serious. The numbers you cite tell the story. Inflation was double digits in 1978-1979 not 3.7%. The first house I bought in 1985 came with an interest rate of about 11% not the 7% to 8% being paid today. Unemployment is at record low levels in the 3% range.
I believe much of the problem has already been solved and the politicians have a huge incentive to resolve more of it by election day in just over a year. Many of us want to go back to 2019 (at least where the economy is concerned), but its just not that simple. Things will improve though.
I love it when people blame sitting presidents for problems caused by prior administrations...
Zoup was ALWAYS expensive. I used to pay $12 for a bowl of soup and a bread roll back in 2019. Of course I am not surprised to hear it's nearing $20.
I went to Potbelly recently and they charged me $14.50 for a BIGGIE sub. Clearly Zoup isn't the only fast casual restaurant to increase prices. After all, as others said they were getting hammered big time during covid and continue to have decreased sales post Covid.
I've been living outside the USA for most of the past 3 years (in Germany). Sure, there was some modest inflation in many items there also, but I have been in price shock mode since I returned to the US a few weeks ago.
Almost anything to do with travel (decent hotels like Holiday Inn Express) or dining out seems to have gone up 30+ percent in three years. Rental cars, holy cow, perhaps 50 percent more than before Covid.
Almost anything I get at the grocery store is also up roughly 30+ percent compared to 3 years ago. I was at a Trader Joe's today and their store brand coffee that sold for $6.99 is now $9.99.
Good thing I have plenty of retirement income. I used to wonder if I could find enough ways to spend my money, but now that thought has faded.
I don't dispute it would be best if inflation were in the 2% range. Two percent range to me is 2 to 3%. At the outside of that range (2.9%) we are only off target by .8%. I always felt it was unrealistic to have perpetual mortgage rates at 3.75% to 4.00%. Those low mortgage rates are part of the reason that housing prices are so expensive (caused by speculators who were driven by those low interest rates).
The drop in inflation from 9% to 3.7% in a short period is an achievement. I only give part of the credit to the Fed for that. I think most of the decrease is due to the way the private sector responded to supply chain issues and solved the problem of shortages on their own.
I agree we have a problem with inflation, but having been a young adult in 1978 I can tell you that today the problem is much less serious. The numbers you cite tell the story. Inflation was double digits in 1978-1979 not 3.7%. The first house I bought in 1985 came with an interest rate of about 11% not the 7% to 8% being paid today. Unemployment is at record low levels in the 3% range.
I believe much of the problem has already been solved and the politicians have a huge incentive to resolve more of it by election day in just over a year. Many of us want to go back to 2019 (at least where the economy is concerned), but its just not that simple. Things will improve though.
Back then employers and the gov't pushed wage increases to match it. Median wages rose 9% per year in the 1977-81 period. Minimum wage was $2.30 in 1976 it was $3.35 in 1981 - 9% per year / 45% increase in 5 years.
I don't dispute it would be best if inflation were in the 2% range. Two percent range to me is 2 to 3%. At the outside of that range (2.9%) we are only off target by .8%. I always felt it was unrealistic to have perpetual mortgage rates at 3.75% to 4.00%. Those low mortgage rates are part of the reason that housing prices are so expensive (caused by speculators who were driven by those low interest rates).
The drop in inflation from 9% to 3.7% in a short period is an achievement. I only give part of the credit to the Fed for that. I think most of the decrease is due to the way the private sector responded to supply chain issues and solved the problem of shortages on their own.
I agree we have a problem with inflation, but having been a young adult in 1978 I can tell you that today the problem is much less serious. The numbers you cite tell the story. Inflation was double digits in 1978-1979 not 3.7%. The first house I bought in 1985 came with an interest rate of about 11% not the 7% to 8% being paid today. Unemployment is at record low levels in the 3% range.
I believe much of the problem has already been solved and the politicians have a huge incentive to resolve more of it by election day in just over a year. Many of us want to go back to 2019 (at least where the economy is concerned), but its just not that simple. Things will improve though.
I agree we have a problem with inflation, but having been a young adult in 1978 I can tell you that today the problem is much less serious
Wrong - it's a lot more serious for two reasons. A) wages have not kept up, and B) look at the cost of real estate, healthcare, autos, higher education, and childcare today. All of them much higher than in the past.
I said it in another thread (which was deleted), that I think we are well on our way to another 2008 real estate crash. People can't afford to live.
I agree we have a problem with inflation, but having been a young adult in 1978 I can tell you that today the problem is much less serious
Wrong - it's a lot more serious for two reasons. A) wages have not kept up, and B) look at the cost of real estate, healthcare, autos, higher education, and childcare today. All of them much higher than in the past.
I said it in another thread (which was deleted), that I think we are well on our way to another 2008 real estate crash. People can't afford to live.
If you think you had some constitutional right to have inflation at a perpetual 2% level you didn't.
Wages have not kept up, but that's precisely one reason why inflation was so low from the 1980's until 2020. Keeping inflation low was partly done on the backs of low skilled people who worked for years without much in the way of raises. Now, even low skilled people are getting raises and its part of the reason for 3.7% inflation.
I doubt there will be a depression in the housing market for a simple reason: Building construction hasn't kept pace and we have a housing shortage.
I doubt you were college age in 1978. Those of us who were remember real inflation. Let me break down the rates for you: 1977 was 6.7%; 1978 was 9.00%; 1979 was 13.3%; 1980 was 12.5%; and 1981 was 8.9%. That was when the problem was super serious.
People complain and I'm not saying 3.7% inflation is desirable, but there really isn't a comparison between today and the late 70's and early 80's.
If you think you had some constitutional right to have inflation at a perpetual 2% level you didn't.
Wages have not kept up, but that's precisely one reason why inflation was so low from the 1980's until 2020. Keeping inflation low was partly done on the backs of low skilled people who worked for years without much in the way of raises. Now, even low skilled people are getting raises and its part of the reason for 3.7% inflation.
I doubt there will be a depression in the housing market for a simple reason: Building construction hasn't kept pace and we have a housing shortage.
I doubt you were college age in 1978. Those of us who were remember real inflation. Let me break down the rates for you: 1977 was 6.7%; 1978 was 9.00%; 1979 was 13.3%; 1980 was 12.5%; and 1981 was 8.9%. That was when the problem was super serious.
People complain and I'm not saying 3.7% inflation is desirable, but there really isn't a comparison between today and the late 70's and early 80's.
Great post and I agree. Also, unemployment was high back then.
Why did you eat there, I'm pretty sure you were able to see the menu before you ordered?
How about because it was lunchtime and I wanted to treat myself for lunch that day?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
