National inflation rate 4-point increase could be canceling pay raises
PHOENIX — Did you get a pay raise at work? Perhaps the national 5.4% inflation rate laid it to waste.
The U.S. Labor Department reports the number sits four points higher than in 2020, the height of the pandemic, and a Valley economist hopes the COVID-19 delta variant won’t slow hiring and the supply chain even more.
“If the production can ramp up, and the supply chain issues can resolve, then that inflation can tick downward,” Danny Court with Elliott D. Pollack & Company told KTAR News 92.3 FM.
“The target has always been about 2%.”
That’s why food, construction materials and appliances are more expensive.
Court added the Federal Reserve hesitates to raise interest rates to slow cash borrowing and purchasing.
“They’re doing everything they can to continue to encourage economic growth until we get to a full-employment level,” he said.
Other economists have told KTAR News 92.3 FM that could be a year from now.
The labor shortage also has employers paying higher wages until they find more talent.
“But, if all those things I’m used to buying continue to increase in price, and I’m back down to or below what I was able to get before, then I really didn’t get a raise,” Court concluded.