IronStats

US Consumer Prices Increased 0.3% in November

The US Bureau of Labor Statistics released its monthly data, stating that the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.3 % in November on a seasonally adjusted basis, after rising 0.4% in October.

Despite historically low unemployment coupled with tariffs on Chinese imports, this signals that inflation remains in check.

American households paid more for energy, food, rent, and healthcare in November.

Source: US Department of Labor

The Energy Index

 The price of gasoline increased by 1.1%, and the other major energy component indexes also increased 0.8% in November. Other major energy categories also saw an increase, with electricity edging up 0.3% and natural gas increasing 1.1%.

Over the past 12 months, the energy index has decreased 0.6%. Gasoline prices declined 1.2% over the past year, and the fuel oil index fell 6.7% over the past 12 months. Conversely, the natural gas index rose 1.1% and the electricity index increased 0.5% over the year.

The Food Index

Food prices edged up 0.1%, rising for a third straight month, with the categories for both food at home and food away from home both increasing over November.

Food at home increased 0.1%, after seeing a 0.3% increase in October. Likewise, the food away from home index increased 0.2%.

Over the last 12 months, the food at home index increased 1.0%. The food away from home category also increased 3.2% over the past 12 months.

Source: US Department of Labor

All Items Less Food And Energy

The shelter index rose 0.3% in November. The index for rent also rose 0.3%, while the index for owners’ equivalent rent increased 0.2% over the month. Over the past 12 months, the index for shelter has increased 3.3%. The medical care index increased 0.3 percent. Over the past year, the index for medical care rose 4.2%.

Overall, the index for all items less food and energy rose 2.3% over the past 12 months.

 

Gold and Inflation: Is Gold a Good Inflation Hedge? 4 Experts Chime In

Gold and Inflation: Is Gold a Good Inflation Hedge? 4 Experts Chime In

Considering that precious metals such as gold have enjoyed a bullish market, there’s no better time than now to invest. An easy way for investors to keep abreast of the price of the glittering metal is with a gold calculator. The question that arises is gold and inflation. In this article, 4 experts discuss whether gold is a good inflation hedge.

Gold Might Be A Valuable Addition To A Portfolio, But Not Because It Is A Good Hedge Against Anything

“In times of economic uncertainty, many advisors suggest gold as a hedge, especially against inflation. In other words, the expectation is that holding gold in the portfolio will compensate for other assets declining in value. Luckily, we don’t need to leave this question to opinion. Instead, we can answer it based on quantifiable facts.

The Federal Reserve Bank of St. Louis maintains a site nicknamed FRED, providing time series of almost any aspect of the U.S. economy. As a measure of inflation, we can use the Consumer Price Index for All Urban Consumers.

By dividing the gold fixing price by the consumer price index, we can inflation-adjust the gold price. With the data available on FRED, we can do so back to 1968. If gold was a good hedge against inflation, we should see the resulting chart continuously trend up.

Unfortunately, this is not what we see. Instead, we can identify the following course periods:

– from 1968 to 1980, gold was by far outperforming inflation
– after 1980, gold prices fell by 75%, and it took until 2011 for prices to recover
– from 2011 to 2015, inflation-adjusted gold prices fell by 30%
– since 2015, gold prices have been mostly flat

Interpreting these results, we find that over the 50-years from 1968 to 2019, gold prices rose about six times faster than inflation. This single finding supports the idea of gold being a good hedge against inflation. However, there have been long periods of underperformance: for about half the time throughout the past 50 years, gold prices were not only lagging inflation but declining at high rates.

In summary, we believe that gold might be a valuable addition to a portfolio, but not because it is a good hedge against anything. Instead, gold can have a place in an investor’s portfolio because its price is mostly uncorrelated to any other economic factor. However, investors considering gold should have a long investment horizon, and only allocate a small percentage of their funds to gold.”

Felix Bertram, Owner, Investment Adviser Representative, Bertram Solutions LLC

Since The US Dollar Is Based On Gold, That Makes Gold A Good Inflation Hedge

 “Since the US dollar is based on gold, that makes gold a good inflation hedge because if the US starts printing too much money and dollars lose their value, anyone who has gold will retain its value even if the dollar becomes worthless from over-printing and inflation.”

Stacy Caprio, Deal Scoop

Gold Isn’t A Hedge Against Inflation

“Gold isn’t a hedge against inflation. It’s a hedge against volatility.

Gold peaked in the early 1980s and then declined for many years.  Inflation grew while the price of gold fell.  When the price of gold reached its nadir, the stock market was booming in the late 1990s.  Then, as the markets corrected in the early 2000s, gold began its ascent.  The price of gold seems to do well when people are not making money in financial markets and not when inflation is actually rising.”

Holmes Osborne, CFA, Osborne Global Investors

You Never Really Know What Is Going To Be An Inflation Hedge Until After The Event

“Up until 2007 the gold price largely tracked the increase in Federal Debt, but since then the relationship has largely broken. Initially, the gold price outperformed the increase in US debt, but more recently, it seems to have underperformed.

The million-dollar question being why? And will all this money printing lead to inflation.

With bonds yields being so low, invariably negative, you’d expect inflation. But it’s not happening. One would also expect gold to do well – let’s say, better than it has. But that clearly has not happened.

But is that about to change?

At Mines & Money last week I spoke with a portfolio manager at a US pension Fund. Although I know he’s always been an advocate of gold, he told me that more and more fund managers were looking at the yellow metal. Increasingly viewing it as a “safe haven asset”.

This does not seem to have fed into the gold market yet, but that doesn’t mean it won’t. Time to take a look at the history books.

Appreciate they 1970’s was a long time ago, but if you compare the bull market back then, with the one we’re in now, two things really jump out at you.

Firstly, how the gold price over the past 20 years or so has largely mirrored what happened in the 1970’s and secondly, if the gold price were to take off AND history was to repeat itself, the gold price could go A LOT HIGHER.

Right now, with the increasing debt and general uncertainty in the World across the World, do you think it’s ridiculous to have at least 1% of your wealth in gold? I don’t

You never really know what is going to be an inflation hedge until after the event. But right now, I think gold should be part of a solution – not THE solution. Because I don’t think there is A solution.”

Simon Popple, Brookville Capital

Taking into account the current uncertainties and volatility apropos of the global economy, gold is a good addition to a diversified portfolio. For those US investors interested in investing in gold with an IRA, have a look at the top Gold IRA companies. In addition, for those who already own gold and are considering storing it offshore, have a look at the top companies for your offshore gold investment.

Should You Be Worried About Inflation Or Deflation? 9 Financial Experts Share Their Views

Should You Be Worried About Inflation Or Deflation? 9 Financial Experts Share Their Views

Inflation is a general increase in the price of goods and services, and a decline in the value of a nation’s currency. Conversely, deflation is a decrease in the price of goods and services, when the rate of inflation falls below 0%. Additionally, the purchasing power of a nation’s currency will increase during deflation. Inflation is measured by the consumer price index (CPI). The CPI measures the changes in the value of a basket of consumer goods and services purchased by households. In this article, financial experts share their views on whether or not investors should be worried about inflation and deflation.

This Inflation Or Deflation Debate Mixes A Lot Of People Up Because The Same Causal Forces Can Potentially Lead To Both Scenarios

“This inflation or deflation debate mixes a lot of people up because the same causal forces (such as high debt levels) can potentially lead to both scenarios depending on the policy response.

When analyzed in isolation, the current macro environment is deflationary. Debt levels as a percentage of GDP are beyond the point of sustainability, and aging demographics lead to slower economic growth and a larger financial burden on younger generations, leading to high default risk over the next decade. Debt defaults involve the destruction of both liabilities and assets; other peoples’ money, which makes this an extremely deflationary prospect.

However, there is virtually no way that the global financial system, as currently structured, would allow a deflationary debt default to occur in countries that control their own currencies. Historically, the policy response to economic environments with this high of a debt load is for governments and central banks to print their way out of it. In a purely fiat system, there’s nothing stopping financial authorities from increasing the money supply to pay all obligations in nominal terms, even if it causes inflation and fails to pay back those obligations in true purchasing power terms.

Therefore, a deflationary or dis-inflationary environment is possible in the intermediate-term, but an inflationary outcome is almost inevitable over the long term due to the policy response to those deflationary or dis-inflationary forces. Rarely in history do fiat monetary systems allow themselves to default nominally.”

Lyn Alden, founder of Lyn Alden Investment Strategy 

Looking Forward Over The Next 12 Months We Do Expect A Dip In The Markets And Some Inflation

 “In an inflationary environment the value of money decreases, which spurs consumption and investment. Deflation makes it profitable to simply sit on one’s savings while the value of those savings increases without any special effort, disincentivizing consumption and investing.

Looking forward over the next 12 months we do expect a dip in the markets and some inflation. Therefore we are therefore poised and ready for investment opportunities that may crop up over this period.”

Robin Lee Allen, Managing Partner, Esperance Private Equity

The Commonly-Cited CPI Metric Might Not Be The Best For Practical Purposes

“Sensing you will likely receive numerous responses to your prompt declaring whether investors should worry about potential inflation or deflation, I thought I would offer up a viewpoint about why the commonly-cited CPI metric might not be the best for practical purposes.

The Consumer Price Index (CPI) has long served as the foundational inflation measure for economic activity. In fact, it underpins the health of an economy because a stable CPI measure indicates opportunity for economic prosperity. Absent predictable CPI readings, consumers will not have an accurate signal about price expectations and may change their behavior in detriment to the economy as a whole.

One major limitation to the current CPI measure is its inability to incorporate decisions consumers might actually make when evaluating a fixed basket of goods. For example, when a price increases for one consumer product included in the selection of goods used to measure CPI, many consumers would choose to switch to a substitute. CPI doesn’t account for this reality. Instead, CPI assumes the consumer would simply pay more for the same product. Reality usually shows a different response in the form of choosing a substitute product.

Instead, a better measure, which accounts for this substitution effect would be “chained CPI.” This more closely resembles the substitution decisions consumers would make in response to rising prices of certain items as opposed to simply paying more for the same good. This metric will capture the switching dynamic.”

Riley Adams, CPA

 A Cost-Averaging Strategy Into A Healthy, Low-Cost, Diversified Stock Portfolio

 “For anyone investing in their future over the long term, they know that everything moves through cycles. There are booms, and there are recessions. Sometimes the latter morph into depressions. And inside these, there are deflationary and inflationary times. Piecing it all together, unless you are an econometric expert, is almost impossible.

The problem is that events in the economy can move fast between inflationary and deflationary forces. Reaction time can be a severe challenge. For the everyday, hard-working American who puts some earnings aside at the end of every month and religiously injects it into a portfolio, keep it up. By cost averaging over time, you automatically smooth out the many ragged edges and the volatility shocks. Then, my recommendation is to invest it in the S&P 500 (a low-cost fund) that evenly spreads every invested dollar over the public markets’ best stocks. By so doing, you are trusting growth stocks and companies immersed in unearthing and refining commodities like gold and platinum (inflationary hedges). Also, defensive stocks like businesses in consumer goods, and well-known dividend-paying stocks (deflationary hedges). You may want to put a small percentage outside the S&P 500 fund into Treasury Inflation-protected treasuries, investment bonds, and keep some cash on hand (both deflationary protectors).

In short, I recommend a cost-averaging strategy into a healthy, low-cost, diversified stock portfolio as the spearhead of a balanced approach to counteract market ups and downs, rollicked by inflation and deflation from within.”

Gordon Polovin, finance expert, serves on the advisory board for Wealthy Living Today

It’s Definitely Something That People Should Be Concerned About

“Central Banks around the world have a target to keep inflation at roughly around 2% (depending on the country this can be higher or lower). Anything more or less than that can be harmful to the economy. If the inflation is too high, prices of goods and services will rise sharply, and the value of cash or bonds will fall. This has happened numerous times in countries like Germany (after the war), Argentina, Zimbabwe etc. Things can get so bad sometimes that prices double every few hours! This is called hyperinflation and Zimbabwe eventually ended up abolishing its currency and instead using foreign currencies as legal tender! Inflation that is too low or negative (deflation) is equally dangerous. It essentially means that good and services will be cheaper tomorrow than they are today. This incentivizes hoarding of cash. With less demand, economic growth slows down and businesses begin to suffer. Inflation levels also impact export competitiveness compared to other countries, foreign investments and can also impact the value of personal or national debts. It’s definitely something that people should be concerned about which is why Central Banks have set targets in the first place.”

Gaurav Sharma, Founder at BankersByDay

Deflation Can Mean A Drop In Wages Or A Drop In Market Prices

“Deflation can mean a drop in wages or a drop in market prices. Not everyone experiences these drops equally and those who are already secure in a higher paycheck won’t notice either of these factors. However, those who are at the bottom of the business have something to worry about. They are likely to experience a cut in hours or a cut in pay, meaning that while they might notice a drop in market prices, they won’t have the additional income to appreciate it. It’s also important to consider that people are constantly looking for a better deal. In the hopes of finding this deal, people will often stop buying and wait. This can cause a dip in sales and cause trouble with the economy.

Inflation doesn’t necessarily make people secure, however. Inflation means a bump in prices, meaning that the dollar in your pocket is worth less than it was before inflation. Now your paycheck doesn’t go as far and you’re concerned about that. You’ll have less for superfluous spending. You’ll hold onto what little wealth you have and as a result the economy will start to dip.”

Chane Steiner, CEO, Crediful.com 

The Outlook Right Now Looks Like One Of Slower Inflation And Because Of That The Risk Of Deflation Is More Of A Concern Now

“Currently the outlook right now looks like one of slower inflation and because of that the risk of deflation is more of a concern now than that of inflation. There are a number of reasons for slower inflation including an aging demographic, technology advancement, inflation expectations, and a stronger dollar. Studies have shown that the aging of demographics has a negative correlation for inflation. In other words, that as a population ages, inflation starts to fall. A good example of this would be Japan, which has battle very low inflation for around the last 25 years. Technology advancement has brought down the price of goods that use new technologies intensively. Historically there has been a correlation of higher productivity with lower inflation. Productivity has been lower recently ,so unless this changes this could be a reason why we start to see inflation rise.

Next, inflation expectations is an important factor in inflation. The higher people think prices are going to go, the more workers will want higher wages, and the higher businesses will believe their costs, and the prices they can charge, will rise. The opposite is true as well, as we are currently seeing inflation expectations from that of the University of Michigan as well as the break-even inflation rate set in Treasury inflation-protected securities. Finally, the stronger dollar leads to lower inflation. This happens because a strong dollar makes foreign imports cheaper which in turn result is cheaper products at U.S. stores, and those lower prices translate to low inflation. So, in order to see the inflation outlook change, we would need to see changes in these factors in order to make that happen.”

Scott Pederson, Financial Advisor, Harmony Wealth Managment LLC 

Investor Should Be Worried About Inflation And Deflation

“Yes, the investor should be worried about inflation and deflation. These both are the major economic factors, and investors should keep them in mind before investing money.

Inflation means the increase in the price of products and a decrease in the value of money value. Regarding this basic rule, investors should invest in products whose return or profit margin would be higher than the inflation rate. For example: If the investor is investing $100 and is expected to get $2 profit next year. He must see what would be the inflation rate. If it would be 3%, then the investor is at a loss of $1.

In times of deflation, investors should preserve the capital or invest in the good having the high return potential in the future. Investment in gold is recommended because no matter what, even after a minimal decrease, its prices go high. So, the rule of thumb is either to preserve the capital or invest it in the products with the potential of higher ROI. Business bankruptcy rates increase during this period. So, do not keep your stock shares or corporate bonds in the companies having the risk of bankruptcy. Instead, invest them in potential business or goods to remain on the safe side. “

 CJ Xia, VP of Marketing & Sales at Boster Biological Technology

Both Have Negative Consequences

“Generally, as the economy recovers, banks are able to loan out their excess reserves to the public. With the increase in money supply, inflationary pressure is also built, causing the prices of goods and services to rise. This worries ordinary citizens, especially those who live pay check-to-pay check because the affordability of basic goods and services is more difficult.

On the other hand, deflation impacts consumers by way of raising their purchasing power since goods and services have become more affordable. But while this may be good news to the public, the same thing cannot be said for enterprises who are affected by the low prices of their goods and services. Eventually when deflation persists, they will be forced to cut jobs and shut down. The public then experiences decline in incomes and therefore, consumer confidence plunges.”

Doug Keller, Writer, Finance Fox 

Both inflation and deflation are economic components that unfortunately cannot be avoided. Keep up with monthly inflation rates and the CPI via the Bureau of Labor Statistics release schedule. In order to offset the market ups and downs during periods of inflation and deflation, a diversification strategy for one’s portfolio is the best bet.

4 Effects Of Inflation On Your Personal Finances

4 Effects Of Inflation On Your Personal Finances

Inflation is a general increase in the price of goods and services, and decrease in the purchasing value of a currency – essentially, it is measuring the temperature of the economy of a country. In addition to the broader implications of inflation on the economy of a country, it also affects one’s personal finances. Inflation is measured by the consumer price index (CPI). The CPI reflects the value changes in a basket of consumer goods and services, which are often adjusted to factor consumption patterns of the average consumer. Yet many people don’t consider the impact of inflation on future financial planning, seeing as the average American doesn’t keep up with inflation. It is something that should always be taken into account, especially when it comes to investments that will provide retirement income. Here are the 4 effects of inflation on your personal finances.

(Source: The Bureau of Labor Statistics)

The Effects Of Inflation On Your Savings

 Inflation affects specific aspects of one’s personal finances differently. One area that is perhaps most susceptible to inflation are cash investments like a savings account. Because money is readily accessible, some people prefer to keep it in a savings account rather than invest it. Yet, as time passes, the value of money kept in a savings account can lose its value, considering that prices generally increase in the future. What you could purchase with $20,000 25 years ago, isn’t the same as the value of $20,000 today in 2019. In essence, the purchasing power of money may decrease while it sits in a savings account at a bank.

 For instance, if a savings account contains $1,000 with an interest rate of 1%, by year’s end the account will have $1,010. If the rate of inflation is running at 2%, then there must be $1,020 in the account to have the same purchasing power that was started with. It’s important to remember, that interest gained in a savings account never keeps pace with the rate of inflation.

In essence, inflation will eat away at one’s purchasing power, because not only will the money lose value, it won’t gain anything either. This can be a cause for concern during retirement when you have less earning power. To protect the purchasing power of your savings from the rate of inflation, it would have to grow at or beyond the inflation rate. An effectual way to beat the effects of inflation on your savings is to invest some of those savings in the stock market.

The Impact Of Inflation On Stocks

 Investing money in the stock market inevitably comes with a higher level of risk than simply keeping money in a savings account. Yet, as time passes, the stock market is expected to be able to handle or exceed the rate of inflation. Because of this fact, some investors prefer to invest their money in potentially higher growth investments like stocks. For those who prefer to avoid the volatility of individual stocks, another option is mutual funds, which usually provide good returns and are professionally managed. Furthermore, index funds might be an even better alternative for some, as they aren’t reliant on a fund manager, and follow their benchmark financial market index.

However, apropos of stocks, inflation still affects the value of the investment. The value of a stock is dependent on the performance of a company. When the economy is strong, inflation is usually high. During these periods, a company may have increased revenue and earnings, which would help their share price. However, as inflation rises, the company would have a larger expenditure for things like wages or raw materials – thus, affecting the company’s value. Additionally, akin to any other return, the stock’s return value will decrease as purchasing power decreases over time.

1979 $10,000 Treasury Bond (Photo: Wikipedia)

The Effects Of Inflation On Bonds And Treasury Bills

 Debt securities like bonds and Treasury bills are fixed-income assets that payout the same amount each year. These assets are not as affected by inflation as money in a savings account. However, when the rate of inflation increases faster than the return on debt securities, their value depreciates. Earnings diminish as purchasing power declines with the rate of inflation.

One option, especially for those in their retirement years, is Treasury Inflation-Protected Securities (also referred to as TIPS). These forms of inflation-protected bonds are indexed to inflation, therefore protecting investors from the adverse effects of increased prices.

Property Ownership And Inflation

 Property ownership is perhaps the most beneficial during periods of high inflation. As inflation increases, so does the value of the property. If you have a fixed-rate mortgage on a property, then the cost of the monthly mortgage payments will decrease as time passes.

However, because most people purchase properties with mortgages, higher interest rates could dissuade people from increasing their debt-load. Therefore, the demand for property decreases, making it more difficult to resell.

(Photo: REUTERS/Carlo Allegri)

Warren Buffet And The Matter Of Inflation

 Preeminent investor Warren Buffet has long been a leading authority on inflation, as he is both focused on and fearful of it. In fact, lest it be forgotten, that prior to the financial crisis of 2008, Buffet, the CEO and chairman of Berkshire Hathaway warned that inflation would cause a collective upset – which it did.

In 2010, after the world was wrestling with the effects of the financial crisis, Buffet wrote a “tongue in cheek” thank you note to the US government.

“We are following policies that unless changed will eventually lead to lots of inflation down the road,” Buffet stated on an op-ed.

In his classic piece for Fortune in 1977, aptly titled How Inflation Swindles the Equity Investor Buffet succinctly outlined his views about the effects of inflation on investors.

 It is no longer a secret that stocks, like bonds, do poorly in an inflationary environment. We have been in such an environment for most of the past decade, and it has indeed been a time of troubles for stocks. But the reasons for the stock market’s problems in this period are still imperfectly understood.

There is no mystery at all about the problems of bondholders in an era of inflation. When the value of the dollar deteriorates month after month, a security with income and principal payments denominated in those dollars isn’t going to be a big winner. You hardly need a Ph.D. in economics to figure that one out.

It was long assumed that stocks were something else. For many years, the conventional wisdom insisted that stocks were a hedge against inflation. The proposition was rooted in the fact that stocks are not claims against dollars, as bonds are, but represent ownership of companies with productive facilities. These, investors believed, would retain their value in real terms, let the politicians print money as they might.”

Despite the fact that Buffet wrote this 42 years ago, certainly words of wisdom from an individual who is legendary for his investing prowess and sagacity pertaining to finance.

Planning For Inflation

 Inflation is a financial component of life that cannot be avoided. However, there are things that can be done. Keep abreast of monthly inflation rates and CPI, via the Bureau of Labor Statistics release schedule. If inflation goes above the 3% level, it could be an indicator of worse things on the horizon. Factor in inflation when investment planning, especially with regards to fixed-income investments. Lastly, when planning for retirement, expect that the rate of inflation will be exponentially higher in the coming decades, rather than decreasing. Also, keep abreast of the market value of gold with a gold calculator. All are good ways to protect your personal finances from the possibility that the rate of inflation increases.

 

New Survey Highlights The Average Americans Feelings Towards Inflation

We conducted a survey asking 1,500 US respondents whether or not they kept abreast of inflation. We used Google Surveys and targeted males and females between the ages of 18 to 65+ from coast to coast. We asked the following question with three possible responses:

Do you keep up with inflation?

  • No
  • Yes
  • I don’t even know what inflation is

The Average American Woman Does Not Keep Up With Inflation, Especially 18 to 24-year-olds

The overwhelming response of Americans, who took part in the survey, indicated that they did not keep up with inflation. A full 56.1% chose this response.

When demographic filters were applied to the survey results factoring females, very compelling insight was discovered. The percentage leaped to 63.6% and skyrocketed to an astounding 75.1% of females between 18-and 24-years-old.

 Conversely, when demographic filters targeted specifically males, 48% stated that they did not keep abreast of inflation. Of the males between 18 and 24 who responded to the survey, 59.8% chose this option.

One possible explanation for the drastic variance of the percentage between genders could be the finance sector. Although blessedly changing, positions across the spectrum of finance and business have typically been held by males – thus, making a larger percentage of males more inclined to keep up with inflation.

Males Are More inclined To Keep Abreast Of Inflation, Especially Middle-Aged Males

 The second most popular response to the survey was 30.9% of respondents indicated that they did, in fact, keep up with inflation.

Yet, when demographic filters were applied focusing specifically on gender, 38.9% of male respondents stated that they kept up with inflation, while conversely, 23.5% of female respondents selected the same option.

When the demographic filters targeted middle-aged males between 45 and 64-years-old, the results soared to 42%. Because almost half of this cohort indicated that they kept up with inflation, they have the highest percentage of respondents who answered “yes” to the survey question.

These results could further be demonstrative of the fact that males, especially middle-aged males, populate a higher percentage of positions across the spectrum of finance and business, which would warrant them keeping up with inflation.

American Women Between 25 and 34-years-Old Indicate That They Don’t Know What Inflation Is

 Of the American respondents who participated in the survey, 13% indicated that they didn’t even know what inflation was.

Yet, interesting insight was discovered when demographic filters were applied to the results, targeting specifically gender. 13.1% of male respondents indicated that they did not know the definition of inflation, while 12.9% of female respondents chose the same response.

However, when demographic filters focused specifically on females between 25 and 34-years-old, 18.6% of this age bracket indicated that they didn’t know what inflation was. Thus, it was the second most popular response to the survey question for this demographic.

Conclusion

Based upon the results of this survey, more than half of all Americans who responded did not keep abreast of inflation. Although a higher percentage of males who participated indicated that they did not know the definition of inflation, the highest percentage of respondents who did not know what it was were females aged 25 to 34. Yet, males, especially middle-aged males, were more inclined to keep up with it. This could be explained by the fact that as a generalization, jobs within areas of finance and business which would necessitate keeping abreast of inflation, are typically dominated by males.

Details About The Study And RMS Score

Sampling
Audience: Users on websites in the Google Surveys Publisher Network
Method: Representative
Age: All Ages
Gender: All Genders
Location: United States
Language: English
Frequency: Once

Root mean square error (RMSE) is a weighted average of the difference between the predicted population sample (CPS) and the actual sample (Google). The lower the number, the smaller the overall sample bias.