As national conversations began to increasingly revolve around the risks of rising inflation, millennials and baby boomers found themselves opposite Another generational gap.
Inflation has always been a growing concern for consumers and policymakers. July, United States Government data It shows that wholesale inflation has risen to 7.8% for the sixth consecutive month. The Producer Price Index (PPI) rose 1%, beating Wall Street’s 0.6% expectation. The Department of Labor found that consumer prices rose by 5.4%, the fastest increase since August 2008.
According to the most recent Bankrate.com The survey shows that 95% of baby boomers report that they have experienced higher prices, and three-quarters of respondents said this has had a negative impact on their financial situation. At the same time, 84% of millennials and 75% of Gen Z respondents said that they encountered higher prices, but fewer members of these groups reported any negative impact on their financial health.
The reason for this gap comes down to two factors: life experience and intergenerational economics.
Baby boomers are classified as Americans born between 1946 and 1964, while millennials are classified as people born between 1981 and 1996. Of the two, most of the baby boomers have directly experienced a period of more severe inflation, which may affect their concerns today.
In the late 1970s, the United States suffered staggering inflation while unemployment rose and wages stagnated. By 1980, the annual rate of change of the consumer price index (CPI) reached 13.5%, while in 2020 it was 1.2%. Federal Reserve Bank of Minneapolis. Deutsche Bank economists in March described the result of years of high inflation experienced by the baby boomers as “Long shadow“Their views on inflation.
In contrast, millennials have lower savings levels than their parents or grandparents, which plays a role in their less pessimistic views of higher inflation. Since 1983, the annual rate of change in inflation has remained below 5%, and has only now exceeded this level.
Fed officials and the Biden administration have been concerned about any potential rise in inflation, especially as Congress moves towards passing new spending legislation.Biden Zeng Flatter A survey in July showed that inflation was slightly lower than in June. He also expressed his commitment to solving the inflation problem and his confidence in Fed officials’ decision to lower interest rates.
Other economists believe in the attitude of millennials towards inflation.A former Fed official suggested Bloomberg TV In July, any surge in inflation may actually be temporary. Some economists have also pointed out that the price drop in certain CPI categories has contributed to the price increase that has cooled down earlier.
