BUFFALO, N.Y. — With high inflation and it impacting just about everything we buy, you have a lot of questions about the economy. The questions 2 On Your Side got on Thursday ranged from having to do with gas prices to how other countries are handling what's happening with prices.
According to the National Retail Federation, in May 66-percent of the people it surveyed were worried about the cost of everyday necessities.
Jan on Facebook told 2 On Your Side he wasn't sure what can really be done except for him to cut back on day-to-day controllable expenses. He said his household will be on fixed incomes soon, so he is a bit concerned especially with medical costs.
And Laura said on Facebook, "Inflation affects seniors - are there any plans to help them?"
So we asked Niagara University's Krieg Tidemann about that. Tidemann is an Assistant Professor of Economics at the university.
"In many ways, seniors might be more impacted, or disproportionately impacted, by the government policy and responses to inflation. In particular, if you think about how your interest rates are being pushed up by fed policy, that generally translates into lower stock prices, and so to the extent that senior citizens or people that are moving on to like their later years are, you know, liquidating, selling off some of their portfolio they saved for retirement, to the extent those aren't in more secure assets, it could mean loss of some of their wealth. So that's certainly something to be thinking about if I'm thinking about seniors," Tidemann said.
And as far as what the government is doing to help seniors, Tidemann pointed to the cost of living adjustments for social security. He said Jan has the right idea, though, and added that trying to avoid credit card debt is also a good idea, but it's easier said than done.
We do know the last recession was in 2020 and it was the shortest on record only lasting two months. Then there was the one that went from the end of 2007 to June 2009 caused by the financial crisis.
To get some clarity, we talked with Tidemann about whether by definition we are in a recession now.
"I think the important thing is that we don't actually know right now. You know, if you think about the formal definition of a recession, that's made by a group at the National Bureau of Economic Research, NBER, where they're going to look at a bunch of different, you know, data indicators and will actually retroactively determine if we actually are in a recession at present. Certainly if we think about an informal definition that's pretty standard for a recession, by that metric, you know, two consecutive quarters of the economy shrinking, we would be meeting that definition as of the GDP report that was released this morning. But, again, I think like some of the things some people might look at is the fact that, you know, a lot of times when you think about a recession, one of the hallmarks, the principal point of pain for a lot of the, you know, American households is the high level of unemployment and the fact is that right now we don't really see that," Tidemann said.
We also got a question about gas prices. We get the numbers every week from AAA. This week in Western New York, they dropped 11-cents from last week. The average price for a gallon of gas is now $4.58.
And while we've seen gas prices trending down in recent weeks, Elizabeth on Facebook wanted to know, "Will gas prices drop soon?"
"We can hope that trend would continue. Again though, it's kind of, there's a lot of uncertainties. When we think about, you know, where gas prices will be going into the future. You know, of course gas prices are set in the world markets, and so therefore that's why the circumstances like the Russia Ukraine War had direct implications when we think about our own domestic gas prices here at the pump. To the extent that maybe if we see increased demand in August, you might see that gas prices might go up a bit, but again, like, it's something, hopefully we've hit that high point, and they'll continue to go down a bit," Tidemann said.
Ultimately, he says it's unknown.
A viewer on Twitter also asked, "How does the U.S. compare to other countries right now on inflation?"
Tidemann says this is happening worldwide and the war in Ukraine is impacting food production, so everything is interconnected. He says the U.S. has had a slightly higher inflation rate that many European countries, but he says you generally see high inflation rates across the world.