Date posted: August 13, 2010
Inflation — how fast the prices of common products go up — is important to most households. What is the latest status of inflation? Is it good or bad? Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
“It is actually pretty good. If we look at inflation at the retail level — so this is prices of common products and services that consumers buy — it is running at an annual rate of about 1 percent. That is a very, very modest rate. I can remember over 30 years ago we had inflation in the double-digit rates.
“There is of course always going to be variation. This doesn’t mean everything that we buy goes up at a 1 percent rate. If you look at items like used vehicles, used cars, clothing, medical care services, they are actually going up at a faster rate than the 1 percent. But on the other hand, if you look at real estate prices — this is both the prices of homes, the financing of homes and rents — those prices are going down.
“Economists also look at another measure of inflation called the core inflation rate, where we take out energy prices (and) we take out food prices. Actually in the latest reading, those prices went down.”
Category: Economic Perspective