Inflation Is Rearing It’s Head Again

If you are 65 today you were around 25 back in the early 80’s when inflation peaked at 14% and interest rates were sky high. For someone who is either retired or considering retirement soon, going back in the future is a frightening prospect.

But here we are, with reports of an escalation in the inflation rate.

NerdWallet retirement and investment specialist Tiffany Lam-Balfour says don’t sweat the details just yet. “There has been a surge in consumer spending, and with such a high demand we are running into some issues where the production of some goods and services aren’t able to keep up, and prices are on the rise,” she summarizes.”

It’s the amount of government giveaways and the devaluation of the dollar that has many concerned, but Lam-Balfour says she doesn’t see a long-term problem. “I think it’s important to keep in mind that it will take a little bit of time but things will calm down, and the really high numbers we’re seeing now isn’t going to be a permanent thing,” she says.

The Commerce Department reported at the end of last week that personal consumption expenditure climbed .4% in May, The index is up 3.9% over the last year, nearly double the amount the Fed targets. That means inflation is increasing at a level we haven’t seen since 2008.

photo: Getty Images

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