Pittsburgh

The Carr Report: Inflationary prices reduce discretionary income – Pittsburgh, Pennsylvania

Pittsburgh, Pennsylvania 2022-06-29 07:00:21 –

Damon Carr, for New Pittsburgh Courier

During this week of writing, I was out and doing errands. I decided to stop by the mini market for some drink. I bought Arizona Tea — half lemonade, half tea. It was happy with my taste and it quenches my thirst. I decided to take a picture of an Arizona tea can. I posted a photo on Facebook and said, “Sit here and enjoy one thing inflation hasn’t affected, Arizona’s iced tea, still $ .99.”

The post collected some reactions and comments. One said, “Make your own tea and lemonade.” He jokingly replied, “The prices of tea bags and lemons are also rising.” Another person added to my comment, “Don’t forget the price of sugar.” Two days later, one person tagged me in a post and another uploaded a meme to my Arizona Ice Tea Post. They shared the same meme. It was an arzonati meme. There were two cans of Arizona iced tea in the photo. Marked at a price of $ .99. The other is marked with a price of $ 1.29. The caption says, “It’s time to officially start worrying!” This post has collected more reactions and comments than my original post. One said, “Do you just want to know what we are blaming, obstruction of transportation, Russian / Ukraine war, COVID, CPU chips? Why is everything up? Another He said, “Damon, it’s your fault. The moment you said that only Arizonati was unaffected by inflation, they raised the price.”

After all, it wasn’t my fault. In fact, the price of Arizona tea remains at $ .99 in the United States. The images of the two cans of Arizona tea infected with the virus are actually Canadian Arizona tea. Cans priced at $ .99 are a few years old. The $ 1.29 price tag is the actual cost of tea in Canada and is adjusted at US exchange rates. My original point remains the same. Inflation may be the only thing that Arizonati hasn’t touched on.

Everyone sees and feels the impact of high prices on gasoline pumps. People who post pictures about how much it costs to fill a petrol tank are trending on social media. Last month there was a host of social media memes poking fun at high gas prices. A meme I recently posted says, “Where can I apply for a” fuel “stamp?” Not only is the price of gasoline high, but I also feel that the number of miles per gallon is decreasing. When I buy petrol, the tank is still full, but it seems that I’m buying more gas.

After going shopping for groceries, my wife told me that she bought almost the same items that she would buy weekly at a grocery store, but the total cost was $ 125 more. We go shopping for groceries every week. If the total cost rises by $ 125 per week, it will be $ 500 more per month for the groceries and household items we spend.

For the person who asked the question, “Why is everything up?” The answer is inflation.. In the rest of this article, I’ll talk about inflation and how it affects prices, purchasing power, and your discretionary income.

What is inflation? Inflation is a common rise in the cost of goods and services. Inflation reduces the purchasing power of your hard-earned dollars. Inflation is a normal part of the economy. It helps promote economic stability and growth. This issue occurs when the price rise is too high or too fast. Inflation is the result of an imbalance between supply and demand. There are two main sources of inflation: cost-push inflation and demand-push inflation.

Cost-push inflation: The higher the cost of manufacturing a product or providing a service, the higher the price. The increased costs are passed on to consumers by increasing their prices and services. Example: I was at a Chinese restaurant the other day.They posted a sign like this: The price of chicken has risen, so all meals, including chicken, have increased.

Demand pull inflation: Demand for goods and services will increase, but supply will not change. An example of this is the current real estate market. There are more buyers in the market than sellers. The end result: Real estate prices are skyrocketing and many people are paying higher than the market prices of various real estate.

Since the launch of COVID-19, we have experienced almost everything we can think of that will ultimately affect supply and demand, which will affect prices. We have experienced a company that completely shuts down production that affects supply. We have experienced problems in importing various products and commodities necessary for producing other products and commodities into our country. A computer microchip comes to mind. Computer microchips have reduced the ability to manufacture cars and reduced the supply of cars. Demand for cars remained the same, with higher prices for both used and new cars. We have inflowed the economy through stimulus checks, low interest rates and student loan grace. All of this has fueled an increase in the money supply to encourage people to spend their money. This increased demand. From pandemics to high unemployment, supply chain problems, and the war between Russia and Ukraine, product production and service providers have consistently been unable to keep up with demand.

The end result is inflation. The Consumer Price Index recently reported an inflation rate of 8.6%. This is the highest inflation rate since 1981. The average inflation rate over the last 60 years has been 3.8%.

The Consumer Price Index (CPI) measures monthly changes in prices paid by US consumers. The US Bureau of Labor Statistics (BLS) calculates the CPI as a weighted average of the prices of baskets of goods and services that represent total consumer spending in the United States.

Below are some of the recently reported cost increases in various categories.

  • All items: 8.6%
  • Food: 10.1%
  • Home meals: 11.9 percent
  • Meals away from home: 7.4%
  • Gasoline: 48 percent
  • Rent: 5.2%
  • Air travel: 37 percent
  • New car: 12.6%
  • Used car: 16.1%
  • Electricity: 12 percent
  • Natural gas (pipe): 30.2%

If you feel worse than usual these days, you are not alone. Inflation has raised virtually all prices. Rising prices have reduced purchasing power. We are paying more at less cost. Employee wages are not keeping up with inflation. The average cost of goods and services has risen by 8.6%. The average wage increase rate has increased by 3.4%. A short story. Discretionary income will be less. Things feel tighter than usual.

Solution: Increase your income: Side hustle or part-time job. Reduce expenses and unnecessary spending. Do a better job of managing your hard earned money. This also passes.

(Damon Carr, Money Coach, please contact @ 412-216-1013 or visit his website at @ www.damonmoneycoach.com)

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