- January 16, 2023
- Category: inflation
Inflation is a measure of the rate at which the general level of prices for goods and services rises and, subsequently, purchasing power falls. Various factors, including an increase in the money supply, increased demand for goods and services, or a decrease in the supply of money, can cause inflation. In the United States, the inflation rate is typically measured by the Consumer Price Index (CPI), published by the Bureau of Labor Statistics (BLS). In this article, we will look at the inflation rate from 2020-2023 and discuss how to calculate inflation, how to survive inflation in 2022, and what the best thing to do during inflation is.
5 Year 5 Year Forward Inflation Expectation
Measures the expected inflation rate (on average) over the five-year period that begins five years from today. The current 5 Year 5 Year inflation expectation rate as of January 13, 2023 is 2.16.
How to calculate the inflation rate
The most widely used measure of inflation in the United States is the Consumer Price Index (CPI), published by the Bureau of Labor Statistics (BLS). The CPI measures the change in the price of a basket of goods and services commonly consumed by households. This basket of goods and services is called the “market basket” and comprises over 80,000 items. The BLS calculates the CPI by comparing the cost of the market basket of goods and services in a specific month to the cost of the same market basket in a base year (currently set to 1982-84).
The formula for calculating the inflation rate is as follows:
Inflation Rate = (Current Period CPI – Base Period CPI) / Base Period CPI x 100
For example, if the CPI for a specific month is 250 and the base year CPI is 100, the inflation rate would be 150%.
How do you survive inflation in 2022?
Inflation can significantly impact your purchasing power, so it’s essential to be prepared for it. Here are a few steps you can take to survive inflation in 2022:
- Invest in assets that tend to perform well during inflation: Inflation can be a good thing for certain assets, such as stocks, real estate, and commodities. These types of investments perform well during inflation because they hold their value better than cash.
- Reduce your debt: High debt levels can make it challenging to survive inflation because it makes it harder to meet ends. Try to pay off as much debt as possible before inflation rises.
- Increase your income: One way to survive inflation is to increase your revenue. This can be done by getting a higher-paying job, starting a side business, or investing in income-generating assets.
- Live below your means: Inflation can make it difficult to afford the things you need, so it’s important to live below your means. Try to save as much money as possible and avoid unnecessary expenses.
What is the best thing to do during inflation?
The best thing to do during inflation is to invest in assets that perform well during inflation. As mentioned earlier, stocks, real estate, and commodities are good options because they tend to hold their value better than cash. You can also look at investing in Treasury Inflation-Protected Securities (TIPS), which are bonds that protect investors against inflation by adjusting the interest rate and principal payments to keep up with the inflation rate.
Inflation rate 2020-2023
In 2020, the inflation rate was 1.3% in the United States, which was lower than the 2.3% rate in 2019. The low inflation rate in 2020 was due to the economic impact of the COVID-19 pandemic.
In 2021, the inflation rate reached 2.6% in the United States, which was higher than the 1.3% rate in 2020 but still lower than the 2. 3% rate in 2019. The increase in inflation in 2021 was due to the economic recovery from the COVID-19 pandemic and the government stimulus measures implemented to support the economy.
As we move into 2022, inflation is expected to continue to rise. The Federal Reserve has stated that they expect inflation to rise temporarily above 2% in the coming months due to supply chain disruptions and the reopening of the economy. However, they also hope inflation will return to its target rate of 2% in the medium term.
For 2023 the inflation rate is projected to be around 2.3%. The Federal Reserve will monitor inflation closely and take action if it rises above its target rate.
Inflation is an important economic indicator that measures the rate at which the general level of prices for goods and services is rising. From 2020-2023, the inflation rate in the United States has been relatively low but is expected to rise in 2022 due to economic recovery and government stimulus measures. To survive inflation, it’s essential to invest in assets that tend to perform well during inflation, reduce debt, increase income, and live below your means. Additionally, you can also consider investing in Treasury Inflation-Protected Securities (TIPS), which are bonds that protect investors against inflation. It’s always best to be prepared for any economic changes and have a plan to protect your wealth.
In addition to understanding the inflation rate and taking steps to protect your wealth, investing in a precious metals IRA can also be an effective hedge against inflation. Gold, in particular, has a long history of maintaining its value during inflation.
American Bullion specializes in setting up and managing precious metals IRAs, including gold IRAs. They offer various options for investing in gold, including gold coins and bars, and can help you understand the process and regulations involved in setting up a gold IRA.
One of the benefits of working with American Bullion is that they are an IRS-approved custodian, which means they are authorized to hold and manage precious metals in an IRA. They also offer a wide range of options for purchasing gold, including coins and bars, as well as a variety of storage options for the physical gold.
By contacting American Bullion, you can learn more about how a gold IRA can help you protect your wealth from inflation. In addition, they can provide detailed information on the process, help you understand the regulations, and answer any questions you may have.
In summary, as the inflation rate is a key indicator that measures the rate at which the general level of prices for goods and services rises, it’s essential to be prepared for any economic changes and have a plan to protect your wealth. Investing in a precious metals IRA, particularly in gold, can effectively hedge against inflation. American Bullion specializes in setting up and managing precious metals IRAs, including gold IRAs. By contacting American Bullion, you can learn more about how a gold IRA can help you protect your wealth from inflation and secure your future financial stability.