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Everything from groceries, gasoline, airline tickets to rent is more expensive than before, and many Americans are wondering when prices will return to “normal.”
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Clearly, these are heavily influenced by the many factors that influence today’s record-high inflation, and there are varying views on how most of them will play out. However, inflation has been trending downward recently. According to the latest consumer price index, prices increased by 6.5% from December 2021 to December 2022. This is still a slight improvement from the June 2022 spike, when prices rose 9.1% year-on-year.
The recent slowdown, largely due to falling fuel prices, is an important step in the right direction. But the Federal Reserve’s long-term target of 2% annual inflation is still a long way off, and the bad news is that high prices for many goods and services are likely to continue for some time.
To prevent unexpected price hikes, many companies enter into long-term contracts, setting months in advance the price they pay to operate their business, from buying raw materials to shipping goods around the world. increase. This means that lower freight and commodity costs will not be passed on to consumers immediately.
Price increases are not limited to contracts with suppliers. Labor costs are becoming more expensive for businesses that need large numbers of employees but are hard to find.
This is why consumers are becoming more and more picky about where they spend their money. This can be frustrating, but it’s not completely helpless. As consumers become more economically conscious, companies will stop raising prices and even offer discounts.
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This is why consumers are becoming more and more picky about where they spend their money. This can be frustrating, but it’s not completely helpless. As consumers become more economically conscious, companies will stop raising prices and even offer discounts.
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