A few basic stats on inflation. Please don't kill the messenger, I believe all of this to be 100% true.
In 2021, 22, and 23, the rate of inflation went up 7.0%, 6.5% and 3.4%, according to the BLS. Noteworthy that the rate of inflation in each successive year is on top of the rate of inflation from the prior year.
In 2021, 22, and 23, the COLA increase in Social Security Checks was 5.9%, 8.7% and 3.2%. Social Security uses a slightly different inflation metric, and they measure inflation during the months of July, August and September of each year for purposes of determining the following year's COLA.
In 2021, 22, and 23, the average wage increases by non-supervisory American workers were 6.4%, 5.5% and 4.5%.
The current year-over-year inflation as of the most recently measured month (April 2024) is 3.4%. May 2024's inflation rate is released on June 12.
While inflation sits at 3.4%, we are able to beat inflation on our savings with interest rates easily available on government guaranteed Treasuries or FDIC-insured CD's of well over 5%. Even net of income taxes, the return is still higher in most cases than inflation.
Some folks are freaking out over inflation, most likely because we haven't had that much of it in a while....but the average annual inflation rate for the 63 years between 1960 and 2022 is 3.8%.
Most people would consider many of those years to be excellent for the economy. When I opened up my first passbook savings account as a young man, the minimum interest rate allowed by law was 5.25%. The fixed mortgage rate on my parent's house in 1964 was 5.25%. The flexible mortgage rate on my first home was 5.50% in 1996 plus two points. Fixed rates that year were much higher, they were over 8%. Lower inflation and lower interest rates are a recent phenomenon, mostly for the last 15 years, but for most of my life, the current inflation rate is not something that would have even raised an eyebrow. I can still see President Gerald Ford on TV trying to get people to wear the WIN buttons, Whip Inflation Now.
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