As we near the end of 2020, all of us can use a little reason for cheer. Fortunately, some positive news has recently come out that provides some financial respite from the tough times of the last year. Inflation data, released by the U.S. Bureau of Labor Statistics, shows that the consumer price index (CPI) rose only 0.2% in November. This data is reassuring as it will ease the burden of making purchases this holiday season.
The low inflation rate is due to a major decline in energy prices that has offset the rise in the cost of other goods and services. Despite the steady rise of the stock market, consumer prices had been generally flat for the past three months. This has been attributed to a decrease in demand due to the ongoing pandemic.
Despite the successes of the stock market and the relatively low inflation rate, it’s important to remember that the economy remains in a precarious position. Joblessness remains high as do levels of risk for businesses. Inflation is expected to stay low for the foreseeable future, but there are still risks inherent in the economy that could impact prices in the coming months.
That said, the low inflation data is certainly a cause for optimism this holiday season. Those planning to make big purchases during the holiday season won’t have to worry about significant price increases. This is good news for the wallets of shoppers as well as the overall health of the economy.
Indications of low inflation are always good news, especially during these tough times. It’s reassuring to know that the worst of the economic disruption from the pandemic seems to than have leveled off, and that this should be a relatively normal – albeit somewhat more cautious – holiday season.
Happy holidays and let’s hope for even more good news as we head into 2021!