From gas and groceries to computers, cars and clothing, Americans are already paying more for everyday expenses.
As the economy reopens in the wake of the coronavirus pandemic, consumers are putting their stimulus checks, enhanced unemployment benefits and stashed cash to work.
Yet all that spending — coupled with supply chain setbacks — is driving prices higher and decreasing your purchasing power over time.
“Inflation is the cost of an expanding economy,” said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York.
Last month, inflation accelerated at its fastest pace in more than 12 years as the economic recovery kicked into gear, the Labor Department said Wednesday.
Americans’ expectations for inflation over the next few years also hit its highest level in nearly a decade, according to another report by the Federal Reserve Bank of New York.
Overall, the expectation is that the inflation rate will be up to 3.4% one year from now — its highest level since September 2013 — and at 3.1% three years from now, the Fed survey found.