Inflation picked up again in March, according to the latest Labor Department report.
The consumer price index, which measures the average change over time in the prices of goods and services, surged 8.5% on the year in March, the U.S. Department of Labor said Tuesday. The most recent report shows the biggest year-over-year increase since December 1981.
Derrick McGill of Hillsboro said he noticed the cost of gas has decreased slightly over the past few weeks, but not by much. Still, it’s a slight relief given the cost of groceries, he said.
“It’s crazy. That’s gone up,” McGill said. “I wouldn’t say twice as much, but you can definitely tell there’s a difference.”
CNBC reports core inflation, which strips out the volatile prices of food and energy, didn’t rise as much as economists anticipated. This means it’s possible March will have been the peak of inflation with prices finally starting to moderate going forward, according to CNBC.
Patrick Means is the Dallas-Park Cities branch manager for Charles Schwab, a financial services company that has been in business for about 50 years. He said loans have also been impacted by inflation.
“If you got loans that are variable in nature, meaning they can change based on different factors like a change in short-term rates. That’s significant because that’s a higher payment in terms of cash flow,” Means said. “If you’re in retirement, living on a fixed income. This going to impact you significantly because you’re looking at what is the interest going to pay me on my investments and is that keeping up with my cost of living now?”
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Regarding loans, Means said it can be difficult for some if they are interested in buying a home.
“Let’s say you’re in North Texas trying to buy a house and when this process started six months ago based on what traditional rates might have been, you afford X. But currently, with rates, you might not be able to afford the same house,” he explained.
As consumers navigate inflation, Means said it’s important to have a plan and understand their finances especially if they have goals on large purchases or expenses.
“Also sometimes, you realize these things are short-lived and there’s no need to panic,” he said. “Yes, these things are concerning. But in investing, there are ups and downs. This short-term down is not going to have a long-term effect, especially if it’s a long-term goal. Just stay the course.”
To combat inflation, the Fed has begun raising interest rates and is expected to continue doing so through the remainder of the year and into 2023, CNBC reports. The last time prices were this high, the Fed raised its benchmark rate to nearly 20%.