Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Denver news in your inbox
Catch up on the most important stories affecting your hometown with Axios Denver
Des Moines news in your inbox
Catch up on the most important stories affecting your hometown with Axios Des Moines
Minneapolis-St. Paul news in your inbox
Catch up on the most important stories affecting your hometown with Axios Twin Cities
Tampa Bay news in your inbox
Catch up on the most important stories affecting your hometown with Axios Tampa Bay
Charlotte news in your inbox
Catch up on the most important stories affecting your hometown with Axios Charlotte
lt will come as a surprise to many Americans that the Federal Reserve has considered disinflation, or the absence of rising prices, to be one of the most pressing problems facing the U.S. economy.
Despite inflation averaging less than the Fed's target rate of 2% per year since the financial crisis, surveys of consumers routinely show them perceiving inflation as closer to 10%:
Jill Milsinksy, Research Director with Advisor Perspectives, recently broke down official inflation data to show how inflation rates differ greatly for different kind of spending, lending insight into why we think inflation is higher than it is, and why people feel economically insecure even in these days of plentiful employment.
"Households vary dramatically in the impact that inflation has upon them. When gasoline prices skyrocket, a two-earner suburban family with long car commutes suffers far more than the metro family with short subway commutes or retirees with no commute," she writes. "And the pain is even more extreme for low-income households whose grocery money shrinks when gas prices rise."
Furthermore, the divergence in inflation rates between product groups shows that even as price growth overall has been tame, prices for the goods that are most important in life—namely healthcare, housing, and education—are rising much faster.
Why it matters: Rising prices in healthcare, housing, and education have dominated the political discourse in national races and local constituencies across the country. The Federal Reserve doesn't have the tools or authority to target industry-specific inflation, but voters across the country are demanding that somebody does stop the relentless rise in prices for the most important things we buy.