With recent CPI reports showing a more favorable view, many are questioning if inflation is a relic of the past or if high prices will continue to be a “thing” in 2023. We’ll explore this topic in our February newsletter.
- The CPI report for December 2022 showed that inflation declined, but still increased 6.5% on a 12-month basis. The year-on-year rise has not been as low since October 2021.
- Gas prices fell sharply (by 9.4%), while items such as food, shelter and apparel displayed small incremental increases. Notably, the fresh fruit index dove 1.9% while the index for meat, poultry, fish, and eggs rose 1%; cereal and bakery products, however, remained the same.
- Despite some encouraging signs, inflation is still high based on historical measures. Prices haven’t been as high since the 1980s, and for many Americans these elevated levels are still hard to manage.
While the future can never be predicted, we believe it is likely that we’ll see inflation gradually heading lower in months and years to come as policy remains hawkish. These CPI measures are statistical figures that do not speak to the personal experience that your household may be having in times like these. If inflation is a concern, your best course of action is to revisit your financial plan with an emphasis on your spending and savings goals.
If you wish to discuss, please set up a time to meet.
Iacurci, Greg. (12 Jan, 2023). CNBC. Here’s the inflation breakdown for December 2022 — in one chart. https://www.cnbc.com/2023/01/12/heres-the-inflation-breakdown-for-december-2022-in-one-chart.html
US Department of Labor. Bureau of Labor Statistics. January 12, 2023. Consumer Price Index – December 2022. https://www.bls.gov/news.release/pdf/cpi.pdf