Inflation puts North Texans’ finances to the test – NBC 5 Dallas-Fort Worth
Inflation resumed in March, according to the latest Labor Department report.
The consumer price index, which measures the average price change over time of goods and services, jumped 8.5% on the year in March, the US Department of Labor said on Tuesday. The most recent report shows the largest year-over-year increase since December 1981.
Hillsboro’s Derrick McGill said he’s noticed the cost of gas has come down slightly over the past few weeks, but not by much. Still, it’s a slight relief considering the cost of groceries, he said.
“It’s crazy. It’s increased,” McGill said. “I wouldn’t say twice as much, but you can definitely tell there’s a difference.”
CNBC reports core inflation, which excludes volatility in food and energy prices, did not rise as much as economists had expected. That means it’s possible March was the peak of inflation, with prices finally starting to moderate going forward, according to CNBC.
Patrick Means is the Dallas-Park Cities branch manager of Charles Schwab, a financial services firm that has been in business for about 50 years. He said loans are another area that has been affected by inflation.
“If you have loans that are variable in nature, that is, they can change depending on different factors, such as a change in short-term rates. This is important because it is a higher payment in terms of cash flow,” Means said. “If you’re retired and living on a fixed income. It’s going to affect you significantly because you look at what interest I’m going to pay on my investments and does it match my cost of living now?”
As for loans, Means said it can be difficult for some if they’re interested in buying a home.
“Let’s say you’re in North Texas trying to buy a house, and when that process started six months ago on traditional rates, you’re affording yourself X. But currently, with rates , you may not be able to afford the same house,” he explained.
As consumers navigate inflation, Means said it’s important to have a plan and understand their finances, especially if they have big buying or spending goals.
“Also, sometimes you realize these things are short-lived and there’s no need to panic,” he said. “Yes, these things are concerning. But in investing, there are ups and downs. This short-term drop won’t have a long-term effect, especially if it’s a long-term goal. Just stay the course.
To fight inflation, the Fed started raising interest rates and should continue to do so for the rest of the year and into 2023, CNBC Reports. The last time prices were this high, the Fed raised its key rate to almost 20%.