The economy’s strength and stability — defying many of the most optimistic predictions — represents a remarkable development after seemingly endless crises
As 2023 winds to a close, Powell and his colleagues are far from declaring victory on inflation. They routinely caution that their actions could be thwarted by any number of threats, from war in the Middle East to China’s economic slowdown. Americans are upset about high costs for rent, groceries and other basics, which aren’t going back to pre-pandemic levels. The White House, too, is quick to emphasize that much work remains.
Yet the economy is ending the year in a remarkably better position than almost anyone on Wall Street or in mainstream economics predicted, having bested just about all expectations time and again. Inflation has dropped to 3.1 percent, from a peak of 9.1. The unemployment rate is at a hot 3.7 percent, and the economy grew at a healthy clip in the most recent quarter. The Fed is probably finished hiking interest rates and is eyeing cuts next year. Financial markets are at or near all-time highs, and the S&P 500 could hit a new record this week, too.
2 years ago yogurt was 40 cents, today it’s 80. Bacon was $3 a pound, today the cheapest is $4.50 unless it’s on sale. Frozen pizzas were $4, $5 on the top end, now they’re $6-$15… for a frozen pizza. Ramen was 20 cents, today it’s 55. String cheese was $4, today it’s $7. A small bag of shredded cheese was $4, now it’s $8. Cereal was $3, today it’s $5 and you get less. Have you seen how expensive a bag or Doritos is? A small bag costs more than what a party size bag used to cost, and that’s true for all chips.
I have dozens of items that are out of reach today that were common fare 3 years ago. Milk and eggs have come back down, yes, but not the rest of it.