North Carolina, Raleigh – Over the past year, the United States experienced the highest inflation rate in four decades.
Inflation, as defined by the Department of Labor, consists of “a process of continuous increase in prices or, equivalently, a continuous fall in the value of money.”
In other words, inflation means that prices increase across the board, which means that money is worth less and less.
What is the current inflation and how does it affect you in your daily life?
Currently the percentage increase in prices in the United States is the highest in the last 40 years.
According to official figures, in the last year inflation was 7.5%. This means that, in general terms, the products and services that people consume daily cost, in February 2022, 7.5% more than in February 2021.
Basically, today a person needs to spend $107.5 to buy the same products that a year ago they could buy with $100.
For this reason, many economists point out that if a person charges the same amount for their work as a year ago, in real terms or purchasing power they suffered a decrease in their salary.
In that sense, to keep their real salary and purchasing power stable, a person should earn 7.5% more than a year ago.
Price Increase in North Carolina
As reported by the Congressional Economic Committee, inflation in North Carolina is relatively lower than the national average: while the country suffered a price increase of 7.5% in one year, in the state the figure was 6.8%. %.
However, inflation also hits North Carolina's pockets hard. Specialists agree that 6.8% is still a significant price increase by North American standards.
But North Carolina also has especially low wages, which have not accompanied price increases.
While more than half of states decided to increase their wages in the last year, North Carolina's minimum wage is stuck at $7.25, an amount that has not increased since 2009.
Furthermore, the fact that inflation in the state during the last year was 6.8% does not mean that all products have increased in the same proportion. Some things increased less, but others much more. For example, gasoline.
According to the same Congressional Economic Committee report, a gallon of gasoline in North Carolina cost $2.51 a year ago, while now the price is $3.50. In other words, if a person earns the minimum wage, a year ago he could buy almost 3 gallons of gasoline by working one hour and today by working the same amount of time he can buy barely more than 2.
What products and services are analyzed to measure inflation?
To find out what inflation is, specialists analyze the “Consumer Price Index”, also called CPI.
The CPI, as informs The Department of Labor measures the average change in the prices consumers pay for a basic basket of goods and services.
The CPI basic basket is developed from information provided by families and individuals about what they actually bought.
The CPI currently includes products divided into more than 200 categories, organized into eight main groups: food and beverages, housing, clothing, transportation, healthcare, recreation, education and communication, and other goods and services.
Some utility fees such as water and sewer or highway tolls are also included.
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