{"id":12739,"date":"2023-10-10T21:08:46","date_gmt":"2023-10-10T21:08:46","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=12739"},"modified":"2024-01-10T17:14:04","modified_gmt":"2024-01-10T17:14:04","slug":"whats-the-latest-news-on-inflation","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/whats-the-latest-news-on-inflation\/","title":{"rendered":"What’s The Latest News On Inflation?"},"content":{"rendered":"\n

Mary Y. from Evanston, IL asks:<\/em> Hi Mitch, I\u2019ve been trying to wrap my head around the latest inflation numbers. Are they good or bad? Seems like prices are still going up, especially for gas. Thank you for your time.<\/p>\n\n\n\n

Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n

Thanks for your question. Understandably, the latest inflation data could be a bit confusing. There are quite a few inflation gauges out there, from the consumer price index (CPI) to the personal consumption expenditures (PCE) price index to \u2018core\u2019 prices and many more. The Cleveland Federal Reserve tracks several, and has numerous ways of measuring inflation across the economy. It\u2019s a lot to keep up with.1<\/sup><\/p>\n\n\n\n

Fortunately, I think most investors like yourself can just focus on one inflation gauge to help avoid confusion. And that\u2019s the aforementioned personal consumption expenditures price index, or \u2018PCE price index.\u2019 This index is the Federal Reserve\u2019s preferred inflation gauge, so it\u2019s the one they consider most closely when setting interest rate policy. As such, it\u2019s arguably the index investors should pay the most attention to as well.<\/p>\n\n\n\n

4 Ways to Protect Your Retirement from Rising Inflation<\/a><\/span><\/strong><\/p>\n\n\n\n

Inflation can be very costly for the economy, but what can investors, especially those nearing retirement, do to keep their investments afloat?<\/p>\n\n\n\n

Instead of panicking, I recommend that investors take a look at steps that could help reduce the sting of inflation. Today, I\u2019m offering our free guide, 4 Ways to Protect Your Retirement from Rising Inflation2<\/sup><\/a><\/span><\/em><\/strong>, which explains key steps needed to navigate through unprecedented times.<\/p>\n\n\n\n

If you have $500,000 or more to invest, download our free guide, 4 Ways to Protect Your Retirement from Rising Inflation2<\/sup><\/a><\/span><\/em><\/strong>, today!<\/p>\n\n\n\n

August data for the PCE price index just came out, and I would frame it as good news overall. The PCE price index rose 0.4% in August from July, which was largely driven by higher gas prices as you mentioned. I\u2019ve written before about why gas prices have been going up, which to restate here is largely a byproduct of Saudi and Russian production cuts combined with stronger-than-expected demand. If you strip out energy and food prices \u2013 which the Fed prefers to do \u2013 then the PCE core price index rose just 0.1% in August. That\u2019s quite modest.<\/p>\n\n\n\n

Year-over-year, August inflation came in at 3.9%, which is a steady improvement from previous annual readings. Take a look at the table below, and you can see inflation\u2019s steady descent.<\/p>\n\n\n\n

Percent Change From Same Month One Year Ago<\/strong><\/em><\/p>\n\n\n\n

\"\"
Source: Bureau of Economic Analysis3<\/sup><\/em><\/strong><\/figcaption><\/figure>\n\n\n\n

Here\u2019s a look at the PCE price index (red line) and the PCE core price index (blue line) in chart form. To your point, the PCE price index has been influenced by higher gas prices, as you can see in the slight uptick of the red line. But core prices, which offer the Fed a better understanding of underlying inflation forces, continued in a downtrend.<\/p>\n\n\n\n

\"\"
Source: Federal Reserve Bank of St. Louis4<\/sup><\/em><\/strong><\/figcaption><\/figure>\n\n\n\n

Another way of zooming out to think about inflation is to look at the 3-month rolling annualized inflation rate, which provides insight as to how inflation is trending. From that vantage, core prices rose at a 2.2% annualized rate in August, which is of course very close to the Fed\u2019s 2% target. That would also qualify as good news, in my view.<\/p>\n\n\n\n

Overall, I think August\u2019s inflation data is positive enough that the Fed will decide to hold rates steady again at their upcoming October 31 \u2013 November 1 meeting. I\u2019m not sure anyone at the Fed is declaring victory over inflation with August\u2019s data, but I\u2019d venture that a few officials are breathing a sigh of relief that price pressures continue abating.<\/p>\n\n\n\n

Inflation can be a worrisome topic to many investors, but there are steps you can take to prevent it from affecting your investments.<\/p>\n\n\n\n

Even during difficult times, I recommend taking steps that could help reduce the sting of inflation. To help, I am offering our exclusive guide, 4 Ways to Protect Your Retirement from Rising Inflation4<\/sup><\/span><\/em><\/strong>.<\/a> You will get insight on:<\/p>\n\n\n\n

\u2022 How to build or modify your asset allocation to outperform inflation
\u2022 The importance of analyzing your spending by category
\u2022 Strategies to maximize Social Security retirement benefits
\u2022 Plus, more practical ideas to fight back against inflation<\/strong><\/p>\n\n\n\n

If you have $500,000 or more to invest, get our free guide today!<\/p>\n","protected":false},"excerpt":{"rendered":"

The numerous gauges used to measure inflation can be confusing. Even though gas prices are rising, the overall news is positive.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[66,71],"tags":[],"class_list":["post-12739","post","type-post","status-publish","format-standard","hentry","category-mitchs-mailbox","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/12739","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=12739"}],"version-history":[{"count":2,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/12739\/revisions"}],"predecessor-version":[{"id":12743,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/12739\/revisions\/12743"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=12739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=12739"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=12739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}