06dis15
March 3, 2019
750 words -including reference-..
March 3, 2019

Inflation and Analyses of Monetary Policies

Inflation and Analyses of Monetary Policies

ECO/561

Inflation and Analyses of Monetary Policies

To begin, the item decided for investigation or analysis from the CPI market basket is a sub-class of the food category and is known as food at home. It is comprised of things, for example, grains, bread shop items, meats, poultry, angle, eggs, natural products, vegetables drinks, sugars and desserts. This can also be known as regular groceries that one would buy on a regular weekly visit. This classification was picked due to its pertinence, reasonableness and straightforwardness in surveying its effect in connection with our assessed normal month-to-month and yearly utilization at home. This food class makes up what are named as unpredictable classifications and is barred from the center buyer value record together with items found in the vitality class. This unpredictability is pleasing in the arrangement exhibited underneath for the period under survey (Amadeo, 2018).

Annual number on groceries

The annual average for the item was $148.42 in 1995, ascending to $189.8 in 2005, then achieving a much higher rate of $215.84 in 2010 lastly settling at $242.25 in the year 2015. The patterns show an incremental ascent in the nourishments at home class throughout the years under appraisal. From 1995 to 2015, there was increase of $93.83 over the 20-year span. The biggest jump in numbers was from 1995 to 2005 with an increase of $41.38 over the 10-year span. Utilizing, “1995 as the base year for assessment, there is a 28% rate increment over the time of 1995 to 2005” (Amadeo, 2018). This is sharp increment as it means family units needed to spend more keeping in mind the end goal to buy things in the sustenance at home classification. The “circumstance is even direr over the resulting time frames as it ascends to 45 percent and 63 percent between the times of 1995 to 2010 and 1995 to 2015 separately” (Desjardins, 2018). This expansion demonstrates that the costs of the things in this class definitely expanded over that period implying that the acquiring force of the normal family unit, ceteris paribus, radically decreased as to the sustenance at home classification. The list “expanded a rate of roughly 20% over the three time frames from 1995 to 2015” (Desjardins, 2018).

The trends over the last 5 years

Beginning in 2012 of interest for this analysis are the annual average figures contained within the on top of tabulation, though the monthly figures are accustomed make a case for the final annual average. It’s additionally necessary to notice that “whereas inflation happen when prices rise compared to the previous year, annual disinflation or deflation happens when prices are slightly under their previous periods” (Amadeo, 2018). Though this seldom happens on an annual basis. Then in 2013, “the year started at 1.59% however fell to a low of 0.9% and ultimately finished the year at 1.5%” (Desjardins, 2018). The annual average is 1.47% that is less than the previous year. Moving onto 2014, the first quarter had the highest rate, “which is common for many years though monthly inflation usually once into disinflation for the following months of July to November finally sinking at an annual rate of 1.62%” (Desjardins, 2018). This is often an increase from the previous dip of .47 intimate in 2013.

CPI Statistics & Human Resources Manager

A human resources manager has to make many important choices about the wages of employees of an organization. HR departments handle the benefits, pay, and other compensation offered to employees for their labor. One of the concepts determined by the CPI is the cost of living in a certain area at any given time. HR managers can use the cost of living data to strategically calculate wages, base salaries for new hires, and salary increases for existing employees. Those factors are a big influence on the pricing of how grocery stores list the pricing of their products due to the location and environment of the store. As an HR manager, it is important to decide wages and salaries for workers but also one factor to look at is the city and state the store is in. This is a crucial factor in determining produce pricing along with the current status of the produce in the economy. Since the cost of living everywhere in the U.S is different, wages, salaries, and prices will all vary depending on the area.

Conclusion

Inflation can significantly decrease the buying power of the dollar it gets too high. The United States government should focus on monetary policies that drive down inflation in order to maintain a positive quality of life for consumers and businesses alike. Food prices, which seem to be directly linked with oil prices, will inevitably continue to rise in the coming years due to the various weather, environmental, and political economic factors such as outsourcing our agriculture industry to Mexico and Canada etc. The U.S is so diverse and the location of where one-person lives is such a deciding factor on the pricing of products and salary for wages. The number can vary so much just because of the location; it can be really high or really low in some places. As an economist, studying the CPI can greatly increase your understanding of inflation.

Reference

Amadeo, K. (2018, August 15). 5 Reasons Why Food Prices Keep Going Up. Retrieved from https://www.thebalance.com/why-are-food-prices-rising-causes-of-food-price-inflation-3306099

Desjardins, J. (2018, January 24). Infographic: A Decade of Grocery Prices for 30 Common Items. Retrieved from http://www.visualcapitalist.com/decade-grocery-prices/

Levin, D. (2018). Food Price Outlook. Retrieved from https://www.ers.usda.gov/data-products/food-price-outlook/

McConnell, C.R., Brue, S.L., & Flynn, S.M. (2015) Economics: Principles, problems, and policies (20th ed). Boston, MA: McGraw-Hill/Irwin.

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