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Inflation has been like a cold you can’t shake. It started off bad, and some symptoms linger like a persistent cough even as things improve.
The latest data from the Bureau of Labor Statistics showed prices rose 3.2 percent in July, the first year-over-year increase after 12 months of declines but a far cry from last summer, when inflation peaked at 9.1 percent.
Things are so much better that households are more optimistic about their financial well-being and don’t think inflation will be a concern much longer, according to the July Survey of Consumer Expectations released by the Federal Reserve Bank of New York’s Center for Microeconomic Data.
Expectations for inflation declined for the short-, medium- and longer-term horizons, the report said.
“Year-ahead price growth expectations for food, medical care, and rent declined to their lowest levels since at least early 2021,” the New York Fed said.
People were less fearful of losing their job in the next 12 months and confident they could keep up with their financial obligations.
On average, consumers’ perceived probability of missing a minimum debt payment over the next three months decreased by 0.3 percentage point to 11.7 percent in July.
But there are still signs the economy isn’t completely healed post-pandemic. Here’s some questions to consider to ensure you aren’t overly confident about your financial condition:
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