The Atlantic Daily: A Guide to Inflation
America is experiencing its highest inflation rate in decades. What does that mean for consumers?
Every weekday evening, our editors guide you through the biggest stories of the day, help you discover new ideas, and surprise you with moments of delight. Subscribe to get this delivered to your inbox.
Inflation was bad; now it’s worse. Prices jumped again in November, new data reveal, moving the inflation rate to 6.8 percent—its highest since 1982. The last time prices rose similarly to this, Ronald Reagan was president and the movie E.T. had just hit theaters.
For older Americans, this means confronting their first serious inflation threat in decades. Younger Americans have never lived through anything like this. To help us better understand what exactly it is we’re facing, I asked our staff writer Joe Pinsker to answer four basic questions.
The conversation that follows has been edited and condensed for clarity.
Caroline Mimbs Nyce: How do I know if I’m experiencing inflation?
Joe Pinsker: We’re all experiencing it, but a couple things make us experience it differently. One is that prices for some goods have increased more than prices for others. Someone who buys ground beef every week at the grocery store will be more aware that meat prices are up than someone who’s a vegetarian.
Another big difference is how much money you have. The prices of everyday goods have increased an average of nearly 7 percent over the past year. That’s a lot—even if the thing you’re buying only costs a few dollars, 7 percent really adds up for people on tight budgets. Meanwhile, people with much more money might notice price increases, but still be able to comfortably afford whatever they usually buy.
Caroline: Why is inflation happening right now?
Joe: Basically, people want to buy more than what businesses are producing. Strong demand (people wanting to buy stuff) is a good thing, considering that we had a recession in 2020, but supply (what businesses produce) has been lagging because of pandemic-related snags like shipping delays and shortages of materials. That imbalance pushes up the prices of what’s available.
Caroline: How long will this last?
Joe: I can’t say for sure—and neither can anyone else, really. One guess is that price increases might continue for the next few months and then slow down sometime next year as supply catches up with demand. But just as important is whether people’s pay rises in proportion with prices. So far, on average, it hasn’t, and that’s what makes things less affordable.
Caroline: Is there anything I need to change about my behavior, or am I just along for the ride?
Joe: As a consumer, you can respond to higher prices—if you need to spend less on gas, you can carpool or take public transit—but your behavior won’t change them. Economic conditions right now might influence your decisions about investing or making a big purchase, but in general, you’re just along for the ride.
Further reading: Josh Hausman explains how the pandemic is contributing to rising inflation rates, and Derek Thompson argues that President Joe Biden can do only so much to help curtail them.
Reflect on the hopeful moments of 2021. Our senior editor Alan Taylor curates this collection of 30 joyous photos from a challenging year.
Read. End your week with a poem. Here’s Marie Howe’s “The Game,” first published in The Atlantic in 1996.
In this week’s Books Briefing, our associate editor Nicole Acheampong explores the world of autofiction.
Watch. First, what’s in theaters: Steven Spielberg’s West Side Story adaptation dazzles, while Red Rocket mesmerizes audiences with its reprehensible lead.
On television, And Just Like That revisits the women of Sex and the City. “There is something irritatingly compelling in the idea that these old characters might be made new again,” our staff writer Sophie Gilbert argues.
Now drumroll, please … This week, we rounded up our top TV shows and our top movies of 2021.
Listen. William J. Walker, who led the D.C. National Guard during the January 6 attack on the Capitol, joins The Experiment to discuss how the events unfolded.
On this week’s episode of The Review, writers on our Culture team try to make sense of the new Ridley Scott film House of Gucci. What exactly is it?
Every weekday evening, our editors guide you through the biggest stories of the day, help you discover new ideas, and surprise you with moments of delight. Subscribe to get this delivered to your inbox.