The U.S. Bureau of Labor Statistics just released inflation numbers for June and…

The U.S. Bureau of Labor Statistics just released inflation numbers for June and we’ve hit yet another high. +9.1% over the last twelve months which is the highest the US has experienced since 1981.

Inflation at this level isn’t good, but let me put a positive spin on things for you.

First, we’re still a far cry from the kind of “hyperinflation” that can destroy an economy. 9.1% inflation means something that cost $10 last year costs $10.91 this year. (This is assuming inflation is consistent across goods and services, which it’s not. It has hit things like gas and housing much worse than other goods and services). Either way, we’re not yet bringing a wheelbarrow of cash to buy a loaf of bread.

We’re also not alone in this inflationary fight. We’re relatively on par with other developed nations. The UK is also at 9.1%. Europe as a whole is at 8.6%. The dollar is actually strengthening vs the Euro, and is equal in value for the first time in 20 years.

There are already some positive signs of recovery. By far, the biggest driver of this inflation number is gas prices. Gas prices peaked in Mid-June and have been dropping steadily ever since. If that trend continues, that means we’ll likely see a smaller inflation number for July. Also, interest rates are on the rise which has begun to cool the housing market. The US Economy is big and doesn’t turn on a dime, but we’ll see impact of that on its way soon as well.

Finally, as worrying or interesting as this may be from a news and academic perspective, there isn’t much YOU PERSONALLY can or should do about it. The same rules apply to you as always. Focus on your lane. Work on growing your income. Reduce your spending. Pay down debt. Invest early and often. If you do those things you’ll become wealthy over time, no matter what the macroeconomic headlines are saying.


Comments are closed.