What It Means to YouFood prices rose 2.1% and medical prices rose 3.2% from a year ago. Lower oil prices and transportation costs are not being translated into lower prices across the economy. This means you will feel the impact of higher prices, even though the government reports say we are in a deflationary period. Deflation is being felt, however, in many areas not measured by the CPI -- home values, retirement portfolios and wages. These are also the areas that contribute to income and wealth for most of us.
In other words, we are experiencing inflation and deflation at the same time. I agree with "The Capital Spectator" that the economy "will be far more complicated and nuanced in what we expect will be an extended period no/slow growth." Nothing as simple as stagflation, which was massive inflation with slow growth. Instead, we are experiencing high prices in things we need, lower wealth and an extended period of slow growth before the economy emerges in a healthier form.
(Photo Credit: Elly Lange /Getty Images)