Inflation Slows, Boosting Purchasing Power But Still Lagging Pre-Spike Levels
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Inflation is slowing down and expected to be 3.2% in December, boosting consumers' purchasing power recently.
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By one measure, people's income and purchasing power have caught up to higher inflation over the past year.
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Purchasing power refers to how much people can afford based on costs and income. It plunged in 2021-2022 when inflation soared faster than wages.
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One study shows wages have not fully caught up to the big price hikes of 2021-2022, so purchasing power still lags pre-spike levels.
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Disposable income figures adjusted for inflation indicate purchasing power returned to pre-inflation levels in December.