How can inflation be only a few percentage points and yet many goods and services are up over 50% since 2019?
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Inflation is how prices in general have gone up across the economy as a whole. Some things will go up far more than inflation, and some things will go up less.
Production cost went up during Covid, high profits from limiting supply and raising prices. There are a lot of things the government doesn’t account for inflation. Food and grocery isn’t account for.
The cost of borrowing has increased substantially
Inflation is always given as the percentage increase from one year ago. So if you see the inflation numbers for June 2023, it’s in comparison to June 2022. It’s also measures a lot of different things and averages them; an inflation rate of 3.5% does not mean that everything has increased by exactly 3.5% over the past year. Some things have increased more than that, some have increased less than that, and some things may have actually gone down in price.
This is because inflation is indexed to a basket of goods. Not all of those items have uniformly risen in price. So the items you noticed more are the ones that have had a larger rise. But the items you don’t notice are the ones that have stayed pretty much the same.
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