"I see a lot of really positive things:" Expert breaks down inflation's current impact on our finances
MINNEAPOLIS – A new federal reserve survey shows 35% of those polled believe they're worse off than a year ago. But there are some areas where prices are improving.
Professor Paul Vaaler, from the University of Minnesota's Carlson School of Management, said inflation is coming down. And you'll notice that at places like the gas pump and grocery store.
Oil prices are down compared to this time last year. That's remarkable, Vaaler says, considering the war in Ukraine.
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Commodity prices, butter and eggs are down. We still see inflation with wages. Higher starting or entry-level salaries are driving prices up. It closes the income inequality gap, but Vaaler says he's curious if those will regulate.
"I see a lot of really positive things. For example, we're back at all-time unemployment lows, especially here in the Twin Cities, somewhere around 2%, 3%. That's frictional unemployment. The extraordinary times may be behind us. What is that Chinese proverb? 'May you live in interesting times.' Maybe they're gonna get a little less interesting in the near term," Vaaler said. "Trends tell you a lot. And the trends right now, especially in the last six months, have been a decrease in inflation. But a really great employment market for individuals. Those are two good harbingers."
In Minnesota, we're doing better than the national average on this front. Vaaler points out that we're anchored to the low interest rates we've seen in recent years or decades, so we've felt things are out of wack. But they're coming closer to what we've been used to.
