SCOTTSDALE, AZ — The Consumer Price Index inflation report for July from the U.S. Bureau of Labor Statistics is expected Wednesday, and some economic experts aren't expecting any major changes from the inflation report from June. Inflation is still hovering around 3 percent, which is above the Federal Reserve's target rate of 2 percent.
"A year and a half ago, we had inflation around 9-10 percent depending on which numbers you looked at, so we’ve come a long way," recalled Jonathan Bird, a financial advisor and founder of Farnam Financial. Bird continued, "Now we’re down to 3 and a half [percent] or so."
Almost every American is feeling the effects of inflation, including Scottsdale restaurant owner Jacob Finley.
"Since 2016, burgers that I was charging $12 to $13 for, now are going for $20 to $21. That is not me actualizing any more profit, it’s me just trying to keep up with what product costs," stated Finley. His business, Karsen's Grill operates in a 900-square-foot unit in Old Town Scottsdale. With a handful of employees and a group of loyal customers, Finley considers himself lucky to still be in business, after getting through COVID-19 and high inflation rates over the last few years. He's had to get creative in order to stay competitive but still make a profit.
"On the menu that I have out currently, I put price ranges on it so that I could raise and lower the prices with the actual inflation numbers that come through every Monday," Finley shared. He said with inflation somewhat stabilizing, and his supplier's prices leveling out, he's hoping to get back to static pricing next week. "I see light at the end of the tunnel - I just think the tunnel's really long."
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Bird and other financial advisors are also hoping the July inflation report shows a cooling of the average prices of consumer goods and services.
"It’s just going to make it easier on our wallets," stated Bird.
In uncertain economic times, the financial advisor recommends investing in Treasury Bills to his clients.
"One thing that anyone with savings can do is, if they have some cash in the bank, use that cash to buy Treasury Bills, which are just short-term loans to the federal government," he shared. Comparing them to a high-yield savings account, Bird continued, "Folks who have been holding cash, especially at a bank... banks really aren’t paying very much interest. Sometimes banks will pay half a percent in interest."
Treasury Bills are taxed at the federal level but not at the state level, and there is no penalty for pulling your money out early. While the average rate of return in the stock market is higher, Treasury Bills are seen as less risky and more attractive to some investors, according to Bird.
