Inflation is slowly easing, but prices still have not come down from double- and triple-digit percentage increases that have taken place over the last several years, and we shouldn’t expect them to.
The rate of inflation takes into account the average level of prices. It does not, however, take into account the increase in all prices. As the inflation rate decreases, prices do not change, but the rate at which prices increase does decrease or slow.
“Prices are going to stay permanently fixed at this elevated level and they are not coming back down because that would be called deflation. We are not going to be experiencing that,” said Dr. David Mitchell, professor of economics and director of the Bureau of Economic Research at Missouri State University.
Mitchell further explained that even when inflation starts to decrease, prices continue to go up and will do so as long as the inflation rate remains a positive number.
The pain is most keenly felt by those living on a fixed income, such as retirees.
Despite Social Security benefits having risen by 58% between 2010 and 2024, the buying power of those benefits has declined 20% over that same time period as the costs of goods and services rose by 73%, according to an analysis by The Senior Citizens League. Prices of bread are up nearly 147%, while prices of ground beef are up 73% over the same period.
CNN reports on the struggles of retirees to live off of Social Security benefits. Here’s the start of the story:
Until last year, Janet Albrecht could afford to eat roast beef sandwiches or tuna salad for lunch. But the widowed 78-year-old now has to skimp on her meals because her Social Security benefits haven’t kept up with the rising costs for food, housing and health care in recent years.
A retired graphic designer, Albrecht estimates she’s paying $100 more a month at the supermarket than she was before inflation started skyrocketing in 2021. Her landlord increased the monthly rent by a total of $65 over the past two years, her utility bills are larger and some of the seven medications she takes daily after suffering a heart attack have gotten more expensive. She hasn’t had a haircut in more than a year, though she doesn’t like to wear her hair so long.
“I’m down to eating ramen for lunch, which I never ate in my life until recently,” said Albrecht, an Indiana, Pennsylvania, resident, who relies primarily on $1,163 in monthly Social Security payments. “If it’s not marked down, I just don’t eat it. I haven’t eaten beef since I don’t know when. I can’t afford it.”
