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Reports last month state our annual inflation rate more than tripled the Fed’s target of two percent, and as prices continue to climb all around, many individuals are feeling increasingly unsettled.
Reality vs. perception: Much of this concern draws down to a “messaging crisis” the White House faces, specifically when it comes to setting the record straight. Current economic data is being compared to the 2020 economic landscape, creating skewed reports that allow both parties to frame in a way that supports their cause. Some of this information is in regard to:
📌Gas prices – While they are up, it’s not as much as some might believe. Prices reached nearly $3-a-gallon during Trump’s presidency, and are also being affected by a shortage of inventories.
📌The U.S. economic climate – Despite a third-quarter dip, the economy is still continuing to grow, and in the first two quarters of 2021, the nation’s gross domestic product (GDP) surpassed six percent annually.
📌The workforce – Much of the 22 million pandemic-induced job losses have been recovered, and, monthly job creation is on the rise.
📌Inflation – Numerous polls show inflation is now the number one concern of voters, surpassing even COVID-19. However, since inflation is measured on a rolling, 12-month basis, comparisons are still being made to 2020, so only time will tell what 2022 brings – and, how the Biden administration will handle it.
My advice: Avoid making personal financial decisions based on your personal political views, or short-term headlines that may or may not be reflective of long-term trends.