CLEVELAND — New inflation numbers released Wednesday showed prices rising 3.4% in July, down from 3.5% in June. While that was in line with analysts' expectations, it remained well above the Federal Reserve's target rate of 2% and outpaced wage growth, meaning it was another month when your dollar was stretched thinner.
That's why Nick from Cleveland told us he sees no positive in the number.
"Definitely everything still sucks," he said.
Yes, while July is in the rearview mirror, August is staring folks like Ines Henry of Cleveland in the face.
"It's getting harder, the groceries more expensive now," she said.
It was just one thing she could manage.
"House insurance went up, everything is overwhelming," she said, adding she doesn't see an end in sight. "No, I don't see no end in sight. I see things go higher and higher."
Getting out to talk to folks like Ines is what we often do at News 5, and it's what Beth Hammack, the president and CEO of the Federal Reserve Bank of Cleveland, does as well. As a voting member of the committee that controls interest rates, she posted this week about the Sandusky restaurant owner who dropped his building insurance after his premiums tripled or the Wooster manufacturer facing soaring input costs that he's unable to pass on to customers. It's something Hammack talked about with News 5 in May.
"When I'm out in the district talking with businesses or individuals, what I hear is that the pain of inflation is real and it's making things very difficult," she said. "We've been missing on that side of our mandate for more than five years, and it's important that we focus to bring that back down to our 2% objective."
She said the insights from those hard conversations are often more telling than the data, which, like July numbers, tend to be backward-looking.
"When I'm out in the district talking to workers or talking to businesses, what I hear about the trade-offs that they're making, the decisions that they will be thinking about in the future, that's where the economy's going, not where we were."
That's why she wrote this week, "Now is the time to act," signaling a likely vote to hike interest rates next month, saying the longer we wait to take action, the "more challenging it will be" and "the more expensive it will be for the American people."
In an interview this week with Yahoo Finance, Hammack said it was still too early to say what she would support at the Fed's September meeting. "One 25 basis point (.25%) move probably doesn't do a whole lot for the economy. So it's probably some number of movement, but I don't want to pre-judge what that number is going to be."
Raising interest rates to curb inflation, fueled in part by the war in Iran, trade policy and other factors out of Washington, comes less than three months before a mid-term election, with voters putting the economy at the top of their list of concerns. Some voters say it will impact what they do at the polls. Nick, though, says likely not.
"It's hard to vote back the other way," he said. "I voted for Trump three times, but you know I'm not happy with him for sure, but it's all a mess, I don't know. The other side's just as crazy."
