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Prices rose 2.6% between October 2023 and the same month in 2024, an unremarkable figure. Yet, inflation seems to be on everyone’s minds. This month, higher prices helped deliver the presidency from the Democrats to Donald Trump. A CBS News Election Day poll showed three-quarters of voters considered inflation a hardship. “I think that cumulative inflation is the main reason people were annoyed, going into this election,” said Ryan Bourne, an economist at the Cato Institute, a libertarian think tank. The emphasis here is on “cumulative.” Inflation has eased, but prices are likely higher for good: about 21.4% higher since February 2020, according to an analysis by the personal finance site Bankrate. Capitalize on high interest rates: Best current CD ratesTo supermarket shoppers paying nearly $2 more for a dozen eggs compared to the start of 2020, Bourne and others said, it might not matter what the inflation rate is now. Here, then, are some basic facts about inflation, the pandemic-era inflation crisis, and who, if anyone, deserves blame. What is inflation? Simply put, inflation means rising prices. In more nuanced terms, inflation is the rate that prices increase over a period of time, typically measured by the month or year. American consumers experience inflation when they lose purchasing power because of rising prices. Inflation is almost always with us, because prices usually rise. “High” inflation means prices are rising faster than usual. Low inflation means prices are rising more slowly. Over the past 20 years, the annual inflation rate mostly hovered between zero and 3%. That would be considered low inflation. Between 2021 and 2023, by contrast, the inflation rate soared to a 40-year peak of 9.1%. That is high inflation. What, exactly, is causing inflation? Economists cite several reasons for the inflation crisis of 2022: The COVID-19 pandemic. To many economists, this is the biggie. The global pandemic shut down much of the economy in 2020. When the world reopened, consumers found many products and services running short. Demand exceeded supply, the classic formula for inflation. The stimulus effort. The Trump and Biden administrations responded to the COVID-19 downturn with stimulus aid, sending checks to American homes. The Federal Reserve lowered interest rates and pumped money into the economy. Those moves rescued the economy, several economists told USA TODAY. They also probably made inflation worse. The Russia-Ukraine war. In February 2022, Russia invaded Ukraine. Many economists cite that event as a leading factor in the run-up of consumer prices. Inflation hit 8.5% the next month. Gas prices soon soared past $4 a gallon. The Federal Reserve is still battling to bring inflation back down to its target rate, 2% a year. A small amount of inflatio …
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