Inflation is easing due to lower food and gas prices and that’s giving some much-needed relief to consumers, but it looks like the Fed is still on track to raise interest rates at least once more.
March numbers show the rate of inflation slowing, dropping from a whopping 6 percent from this time last year to 5 percent this year. It’s the ninth consecutive month it’s fallen, but inflation is still way above normal.
Grocery prices fell for the first time in two-and-a-half years, down three-tenths of a percent from February to March. Beef, milk, fruits, vegetables, and eggs all came down a bit. Gas prices also fell 4.6%
E.J. Antoni, an economist with the Heritage Foundation told CBN’s Faith Nation that’s a good sign. “It’s very, very good that we’re seeing, for example, energy prices come down because those energy prices affect literally everything else within the economy,” Antoni said.
However, Antoni says people’s paychecks are still not going as far because incomes aren’t going up as fast as inflation – and partly due to higher borrowing costs.
“What happens is, as prices go up faster than wages, even though you actually have more money in your paycheck, you can buy less, and so that’s what we mean when we talk about real wages. Inflation has robbed you of your purchasing power,” Antoni said.
Still, prices in the service industry continue to rise. Businesses and consumers are doing the best they can to cope. “I’ve definitely seen a little bit more price-conscious consumers lately,” said Chris Alfano of Doris Italian Market & Bakery.
Florida resident Rich Pierson said, “Certainly we cook more at home than we ever have due to the rising costs.”
The Fed is expected to continue raising interest rates to bring inflation down, but that’s also hurting consumers and so the Fed may take a pause after another hike next month.
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