July 18, 2022
In the 1970s, the U.S. experienced inflation to the tune of about 14%. Today we’re “only” around 8% inflation, so everything is fine, right? Not necessarily.
Inflation now is coming far more quickly than in the 1970s. Consider that inflation began at 5.5% in 1970 and hovered around that level for a while. Eventually it began rising, climbing to 14% in 1980.
So, it took a decade to rise about 8.5%.
Today, inflation has soared from 0% in 2020 to the recent record high of 8.5%. That same 8.5% rise that took a decade in 1970 occurred today in a span of less than two years.
Plus, millions of Americans have never experienced anything like this. A healthy portion of our adult population wasn’t born by the late 1970s or were too young to remember stagflation or fuel rationing.
Speaking of gas, let’s look at the 1970s and today through the fuel lens. In 1970, the average American paid $0.36 for a gallon of gas. By 1980, that same gallon cost $1.19, an increase of 230% in a decade. Adjusted for today’s prices, that means gas went from $1.72 per gallon in 1970 to $2.95 per gallon in 1980, a 72% increase.
As of May 2022, the average cost of a gallon of gas in the U.S. is $4.62. It was $1.94 in 2020. That’s a more than 120% jump in the span of two years.
No wonder so many Americans have been blindsided!
What about housing?
Despite rising interest rates, home prices still skyrocketed at the highest rate in 35 years in March. Home prices across the country skyrocketed 20.6% on an annual basis. This is the fastest annual increase on record. Rents are up too.
Is today’s inflation worse? It might be.
