Home
>
Political
>
Gas Prices and the Impact of Inflation

Gas Prices and the Impact of Inflation

Year Item Price Rate of Inflation 03/80 Gasoline (per gallon) 1.252 03/05 Gasoline (per gallon) 2.065 2.02%

03/80 Bread, white, per lb 0.502 03/05 Bread, white, per lb 1.002 2.80%

03/80 Consumer Price Index 80.10 03/05 Consumer Price Index 193.30 3.59%

Source: U.S. Department of Labor - Bureau of Labor Statistics (www.bls.gov)

What is Inflation?

Inflation is an indication of the rising cost of goods and services in the economy. For example, a gallon of regular unleaded gasoline was 1.252 in March of 1980. Comparatively, that same gallon was priced at 2.065 in March of 2005. Therefore, over the last 25 years, the cost of a gallon of gas has increased at an average annual rate of inflation of 2.02%. As another example, during the same 25 year period, the price of white bread increased at an annual rate of 2.80%.

The Consumer Price Index (CPI) is widely accepted as the measurement of general inflation in the United States. The CPI is calculated monthly by the U.S. Department of Labor - Bureau of Labor Statistics. It is an index based on the cost of items in more than 200 categories. They include: breakfast cereal, milk, wine, bedroom furniture, men's shirts and sweaters, jewelry, physicians' services, televisions, sports equipment, college tuition, postage, and haircuts.

Simply stated, the CPI tells us the average change over time in the cost of goods and services. From March 1980 to March 2005, the inflation of general goods and services averaged 3.59% annually.

How is Inflation Relevant?

Inflation has an impact on our plans for the future. When saving for retirement, college, a house, or simply budgeting for the next 12 months, the cost of goods and services have a direct impact on your goals. Due to inflation, your goals may cost more in the future than today. A meal that costs $10 today may cost $10.36 in one year. A car that costs $10,000 today may cost $10,359 in one year, and almost $12,000 in only 5 years. So, when planning for the future, you must consider inflation and the effect it may have on your goals.

Ways to Combat Inflation

One way to overcome prices that may rise due to inflation is to make your money grow at a rate higher than inflation. For example, if inflation is 3.59% annually, you will need to make your money grow at 3.60% or higher. Otherwise, though you may be saving and investing toward your goals, you may never actually achieve them.

Many investments provide a vehicle for "outpacing" inflation. Generally, stocks and bonds have historically earned an annual rate above inflation. Through careful planning and investing, it is possible to overcome inflation and its impact on prices.

In summary, a plan that does not account for inflation is in danger of failing. Therefore, it is important to remember inflation and invest in assets that will enable you to achieve your goals despite the effects inflation may have on the cost of goods and services.

Jonathan Citrin provides financial goal planning services. Go to http://articles.citringroup.com for hundreds of educational articles about Personal Finance, Retirement Planning,Investment Planning, and College Savings.

Batchtown Chicago prom limo .. Lockport Chicago limo O’Hare

In The News:

A virtual private network can help ensure your information remains security and your privacy remains intact. Kurt the CyberGuy explains.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Artificial intelligence-based cameras are giving air defense operators unprecedented capabilities in monitoring and protecting airspace.

Apple's iOS 18.1 Inactivity Reboot automatically reboots your iPhone if it hasn't been used or unlocked for more than three days, providing better data protection.

An inventor designed rooftop solar panels for a Tesla that draws solar energy while the car is parked, adding travel mileage without plugging in.

There are currently no laws governing what artificial intelligence can and cannot do with the information it gathers; here are 10 things to avoid telling AI chatbots to keep yourself safe.

A credit union with over 240,000 members recently revealed it was targeted by cybercriminals, resulting in a data breach that was part of a two-month attack by hackers.

Scammers have become skilled at creating convincing fake websites that can easily fool unsuspecting users. The CyberGuy offers tips to protect yourself.

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

CAPTCHAs, which are used by websites to confirm whether users are people or bots, are harmless, but hackers are using them to infect PCs with malware.

Hackers recently leaked personal information of about 500,000 Americans and stole patient medical records that included lab results and insurance details.

The holiday season sees a rise in mobile shopping scams. Tech expert Kurt “CyberGuy" Knutsson helps you learn how to stay safe.

Tech expert Kurt “CyberGuy" Knutsson says a VPN enhances online banking security by encrypting data and protecting privacy.

Beware of these six sneaky holiday scams. Tech expert Kurt “CyberGuy" Knutsson gives you tips to avoid falling victim.

Tech expert Kurt “CyberGuy" Knutsson reveals how to securely back up and factory reset your Android to protect your privacy and data.

Artificial intelligence is making life easier for cybercriminals, allowing them to create elaborate scams to trick people. Kurt the Cyberguy explains how to protect yourself.

Cut through all the digital clutter and delete multiple emails from your Android simultaneously. Kurt the CyberGuy explains how it's done.

Tips to prevent your holiday decorations from being stolen

Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future.

Kurt "CyberGuy" Knutsson lays out the immediate steps you should take if your phone has been hacked and your personal information becomes vulnerable.

Fraudsters are sending people bogus invoices through PayPal as part of a sneaky scam that is going around; here's how to protect yourself from being fooled.

A former Colgate-Palmolive employee was shocked to discover $750,000 had been drained from her 401(k) account. "CyberGuy" offers tips on how to prevent identity theft.

Electric vehicle maker Harbinger recently showed its electric delivery truck can handle icy roads with agility and stability in winter.

To make the busiest time of year more manageable, here are some tricks for tracking your packages, taking quality family photos and curating the perfect Christmas playlist.

Kurt "CyberGuy" Knutsson explains how to keep your online Amazon gift purchases a secret from loved ones or friends this holiday season.

Gas Prices and the Impact of Inflation

Political