Within the last year, the all-items consumer price index (CPI) reached 6.5 percent across the country (this was before the typical seasonal adjustment). Having a financial advisor in Orlando can help you navigate the questions or uncertainty you have around inflation. Energy and food costs rose by 0.3 percent in December alone, but overall December’s index was lower compared to the previous 12 months according to the U.S. Bureau of Labor Statistics. It marked the smallest increase in inflation since October 2021.

Consumer Price Index Inflation

While the end-of-year CPI was lower, the core inflation rose 0.3 percent. This increase is mostly due to the rising cost of housing and groceries.

• Core Inflation: mostly tied to goods and services, measures overall inflation excluding prices of volatile items like energy and food.

The goal for core inflation is to keep annual increases at 2%, so this steady increase is still keeping economists keenly aware of the subtle changes. For many, housing and food concerns lead individuals into the realm of skepticism in regard to their finances. Rising housing costs largely affect families and their budgets the most when core inflation measures change. For those locals, an Orlando financial advisor can keep your food cost worries at ease by assessing the big picture of your personal financial outlook.

Inflation Outlook: Past And Present

A positive economic outlook some economists have noted is that gas prices fell in December, leaving many people relieved of the cost of daily transportation. On December 26, average gas prices in the nation were at $3.09 a gallon according to the Energy Information Administration. This alone was a large contributor to the CPI lowering for the month of December. Airfare costs, however, rose by 28.5%. While many costs are leveling since the pandemic prices peaked in June 2022, overall inflation remains at an all-time high when comparing the inflation to the previous few decades in the U.S.

Looking ahead, prices of services are likely to also decrease with other typical household goods. The real question lies in the upcoming Consumer Price Index reports. If they continue to have a steady trend, this will be exciting news for many of our pocketbooks. However, with ongoing inflation for other goods currently, such as eggs, there may continue to a big spike or increase in the following months. The federal reserve will be watching closely to see if we can manage, as a country and individual consumers, to keep a balance of our finances as time moves forward. Many financial experts like our Orlando financial advisors will suggest not planning for potential price surges alone, and to always consult with a professional who can help keep you and your family above water in uncertain times.

Conclusion

The Consumer Price Index can be a good measure of an economy’s overall health and longevity. While December’s annual CPI percentage decrease got the attention of the public, overall annual inflation is still a risk, and federal reserve rates are increasing. By keeping yourself informed about the CPI changes, you can make adjustments to your budget that will help you sustain your lifestyle with the right financial tools.