Source: Joe Raedle / Getty
MUNCIE, Ind. — Inflation is down to 3-percent so far in 2023, which is down from 7-percent in 2021. Those numbers were released by the White House on Thursday and are backed up by US Inflation Calculator.
The stats are a good thing when it comes to the overall health of the economy, says Ball State economist Mike Hicks. But he said the economy is still in a fragile state with interest rates still high to stave off high inflation.
“Raising interest rates, which reduces the cost of consumer borrowing, or consumer debt, which causes us to borrow less, to spend our money paying off debt, rather than going on vacation and buying a new car,” Hicks said on WISH-TV.
Then there is the price of everyday goods like food and gas. Gas prices have increased again in Indiana this week, but that was after seeing a month straight of declines. But, Hicks said you should not expect similar decreases in the price of food at the grocery store.
“There shouldn’t be any expectations that prices in general are going to come back down, just that the increase in prices will be more like it normally is, about 2-percent to 2.5-percent per year,” he said.
COVID lockdowns and a labor shortage weren’t the only factors that caused prices to skyrocket over the past year. Russia’s invasion of Ukraine in early 2022 and an outbreak of avian flu last year caused prices to go up.
