Inflation, according to the consumer price index, rose 9.1% in June, compared to the same month a year ago. This pace is higher than in any month since November 1981. It threatens to drive the economy into recession, and there is no ready solution. (Also see, record inflation driving up prices for these 40 household items.)
Some economists argue that higher interest rates will help tame inflation and lower the prices of items used by both business and consumers. Though the Federal Reserve has started to gradually raise rates (too gradually, according to some), these rate hikes did not begin until this year. And one prevailing school of thought is that the central bank should have started the process last year.
The belief that inflation will cause a recession is almost unanimous. Wages are not rising as fast as prices. Faced with high fuel and food costs, consumers are seeing their household budgets squeezed. That has lowered discretionary spending, which is a major driver of gross domestic product.
Inflation may cool only if unemployment rises and even more people curb discretionary spending. The current unemployment rate is near an all-time low of 3.6%. The number of people willing to take jobs today is so limited that many jobs remain unfilled. This means unemployment may stay where it is for months. (Here are states where job openings are on the rise.)
One way that people can combat inflation, at least for themselves, is by avoiding purchasing items with prices that are rising most rapidly. Some of these purchases are unavoidable, but others are discretionary or easily replaceable items.
To find purchases that consumers should be aware of buying during inflation, 24/7 Wall St. reviewed data on the cost of household items from the Bureau of Labor Statistics, and also considered other, broader categories. When possible, we suggested alternatives.
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