Inflation and its Effects

Hi, everyone. My name is Gabe Johnson.

I am a sophomore here at Salt Lake Community College

and today I'll be talking a little bit about, um,

inflation and the effects it has on our everyday lives.

Um, but before I do, I just love to tell you a little bit about me.

Um, like I said, I'm a sophomore here at Salt Lake Community College.

And, um,

um, I'm, I'm majoring in finance and planning to use that to

jumpstart my career into the medical field as an orthopedic surgeon.

And you might wonder how those two kind of

go hand in hand and really orthopedic surgeons and just

doctors in general, they tend to run their own practice a lot of the time.

You're going to just see one doctor and he has his own,

his own setup and he has his own employees

and taxes and all those different kinds of things.

And

having that background in, in

the finance world and just economics in general is just, I feel such

a,

such an advantage to

going into running my own practice as a, as an orthopedic surgeon. So,

if you couldn't figure out quite why I um

how those two go hand in hand. That's, that's kind of my thought process.

That's kind of how my head works. I just,

I feel like it's just such a heads up

or the jumpstart into the,

the field I want to go into as opposed to those who maybe are just studying medical,

but there's nothing wrong with that.

I just want that extra, that leap.

And um

I've loved taking this class and learning alongside each of you and

learning the different principles of economics each week. And

I'm excited to, to share with you one of my favorites, you saw it earlier.

Um One of my favorites we've learned about

and one that I feel very passionately about

is that of inflation.

And I'd love to tell you a little bit about

why I'm so passionate about the topic of inflation.

And it all started about two years ago

um while I was serving as a missionary for

the Church of Jesus Christ of Latter Day Saints.

Um I just got back from my mission about a year ago

and um

at the beginning of my mission. So about three years ago, at this point,

um

my campaigns and I, we go shopping every,

every Monday

and we would um

every other week we would buy a box of,

we go to Walmart to shop and you can buy a box of 60 eggs at Walmart

uh for like $8 super cheap. And

that is breakfast for two weeks. So it was perfect.

And, um,

as I went on to my mission,

um,

I saw that, that,

that $8 box of eggs became $9 and then $11.13 dollars.

And by the end of my mission, by the end of my two years, um,

the price of that,

um, that box of 60 eggs

went from about $8 to $17.01. Um,

every Monday we'd also call home as well.

And I called my mom, like, why is the price of eggs going up so much?

And it wasn't just eggs at this point.

It was, it was everything we were buying, it was bread, it was

gas, it was any kind of grocery. You can think it was really anything

we were buying, the price was going up. And

I was so confused because as missionaries, we're kind of like

outside the world, like we're not on like a lot of social media or

have the news or anything like that. We're just kind of doing our thing.

And so we're not really focused on that.

And so I asked my mom, like mom, like, why is, why are things so expensive at this time?

The, the major

it was the bird flu was going on,

but also it was inflation, the, the price of things, not just eggs were going up and

your dollar wasn't going as far.

And that really just kind of piqued my interest ever since then, just

looking at the prices of gas or looking at the different prices of groceries

and seeing how, how they fluctuate and

what um

what causes those things to happen.

And so today, that's what I'll be talking about for just a little bit of inflation.

And really these big questions of what it is,

where does it come from and how does it affect each of us personally?

So to start off what is inflation?

And so we find out the definition of inflation from our handy dandy textbook.

Um it is a sustained and substantial increase

in the average level of prices

or, or simply put

each dollar of income will buy less good and services than before.

And so

pretty, pretty simple straight up right there.

And uh we learned from Forbes um really big

economics website and

magazine and just a bunch of different things.

They, they know their stuff about money.

Um

They

um

according to Forbes,

um inflation is just a normal part of everyday life. Prices of things go

up and down all the time.

That's just part of the economy, the economy expands and contracts

every single day.

And according to Forbes,

it's just a by product of

inflation, just a byproduct's and contractions.

Um However, when we see these major changes happen in prices of gas,

I'm sure we've noticed gas a couple of years ago.

Was it $2 now? It's even up to five

or the price of gas or price of eggs going from

$8 for 60 to $17 for 60.

It's

um

when we see those major changes, a couple of things are happening, there's

um

either what's called

deflation

or hyper inflation deflation is when prices are dropping.

And hyperinflation is when prices are going up crazy

at a crazy pace.

And so to go back,

where does this come from?

And like I was just saying, it's just a natural part of the economy.

Every prices change all the time.

And we can see that in this,

this graph right here, we see a this is a 20 year uh price change. Um

Things will go up and down all the time. It just kind of depends on

what the economy is doing and

all those different kinds of things.

So in regards to how does inflation affect us? It goes right back to

that story of eggs

um

that

your dollar isn't going as far those 60 eggs I used to get for $8

that $8 would now only get me a little carton of 24 eggs. It, it's less than half it.

That,

that same box of eggs, like I said, cost $17

and I'm sure all of you have noticed this.

But

um I just wanted to ask the question,

has anyone else seen that their money doesn't get them as far as it used to?

Do you pay more for gas? Do you pay more for groceries? Is your rent going up? Is

are you just noticing prices of everything going up?

And

I'm sure each of you have.

And so the next thing I want to talk about

is the inflation rate in the United States and really

what's going on with them.

So,

uh currently in the year 2023 the average um rate of inflation

um has been about 3.1%. However, over the past couple of years,

um the inflation rate, as we can see in this graph right here

has been around 8% which is

astronomical, it is huge.

And

um

we find this inflation rate

through what's called the CP I or the consumer price index.

Um

And we find the CP I or we find the um the

inflation rate

when we compare um

the, the CP I to to previous years.

Um

They are more simple layman's terms. The CP I is quote

a measure of the price level based.

Um

Sorry, let me get this.

Um The CP I is a measure of the price

level based on the consumption patterns of a typical customer.

And that comes from our textbook,

so which it can also be referred to as the cost of living index. So what it just cost to

drive your car to buy groceries to do whatever you need to do.

That's what the CP I is.

Um

And while the inflation rate

is

dropping currently,

um it's down to that, that 3% range. It isn't quite where,

um, the,

uh, the Federal Reserve Board

has a goal of what our, what our leaders have a goal of.

And they actually just released a statement

um, a few days ago

regarding what their goal for.

Um,

sorry, I skipped that.

Uh They have a goal for what they,

um,

what they want the inflation rate to be. And I'll just share the

as we look ahead to next year.

I want to assure the American people that we're fully committed

to returning inflation to our 2% goal,

restoring price stability is essential to achieve a sustained

period of strong labor market conditions that benefit all.

So you heard it right there,

they have a goal to get the inflation rate to around

2% which is another percent of where we're at right now, which is

a great goal.

It's, it takes a lot to drop the inflation rate and there, there are things being done

um

to drop that inflation rate. There are things that

um our highest up leaders like the Biden Harris administration.

Uh They have what's called the inflate, the Biden Harris inflation plan,

lowering costs and lowering the deficit which has been put

in place to try and lower that interest rate.

Um

And there's lots of different things that all of our leaders are doing,

but there's also things that we can do as well, how we personally can fix inflation,

how we can fix inflation, sorry.

Um

And really how we can buy eggs for cheap again, how I can buy that 60

that pack of 60 eggs for $8 again.

And really, that just comes by being smart with our money,

by being a shopper and taking advantage of lower interest rates.

Um

A lot of it does rest upon the shoulders of our

um

of our big local and state and federal leaders,

but there are things that we can do as well.

Um And there are plans in place, which is, which is showing really good signs.

So hopefully that inflation continues to fall and we get to that 2% goal of what our

um what our leaders have in mind.

Um

But we do live in the greatest country in the world and I know that we can do it.

Um

Hopefully one day there

won't be a point where

most people don't have to work two jobs to,

to stay afloat so they can just buy groceries and gas, keep a roof over their head.

Um But I know we can do it.

Um

I know that inflation rate will drop as we

continue to keep doing the things that we're doing

to lower that inflation and one day we can buy that box of 60 eggs for $8 again.

Um

That's all I have to share with you.

Uh Thanks for listening here is my

work cited page and I hope you have a great rest of your day.

Inflation and its Effects

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