Economists warn Central Texas to plan for inflation’s lingering effects
WACO, Texas (KWTX) - Local economists are urging Central Texas families not to ease up on their money saving practices despite new economic reports showing inflation may be improving.
The Bureau of Labor Statistics on Wednesday released the Consumer Price Index for the month of April. The CPI is an indicator of how much the average price of a basket of basic goods and services has changed since the previous year.
According to Tuesday’s report, the average price of the basket of goods and services this April rose 8.3 percent compared to April 2021. That figure, however, is down compared to March 2022, when it was 8.5% higher than March 2021.
Despite the decrease in inflation rate from March to April, economists like Robert Tennant, a professor of economics and accounting at Texas A&M Central Texas, say the broader picture shows inflation is still a deeply impactful problem that is not declining as quickly as it should.
“It is good that it’s not continuing to grow larger and larger,” said Tennant “but I don’t know that we are out of the woods people are still going to be feeling the hurt, because even if it stays around 8 percent over the summer, that would be 8 percent compared to a year ago when things were getting more expensive,” he said.
The March to April decline of 8.5% to 8.3% is less than economists had predicted, but it does suggest that the worst of the inflation issue from the past year may have passed. April’s inflation rating, however, is still the second-highest inflation increase rate since the 1980s.
Wednesday’s report shows the largest increase in prices for food, shelter and new cars in April and the price of energy decrease after rising in recent months. The report also shows used car prices have decreased for the third straight month.
The report comes as nationwide the US is seeing the highest gas price on record: $4.35 a gallon.
Tennant urges that families should continue practicing money saving habits well into the summer as there is no indication that inflation will drop as quickly as many hope it will.
“The best way to fight inflation is to budget,” said Tennant. “When inflation happens many people will combine multiple errands into one trip or they’ll start buying in bulk and that’s what people will need to do for a while,” Tennant said.
A day before the report was released President Joe Biden declared inflation “the No. 1 problem facing families today.”
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