Prices are rising faster than they have in six years

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If you feel like stuff has been getting more expensive lately, you're right.

The Consumer Price Index, which tracks most items on the average city-dwelling American's shopping list, rose 2.9% last month — its fastest pace since 2012.

When prices speed up, paychecks don't go as far. Average hourly earnings only increased 2.7% over the year in June, which means that most workers' paychecks actually aren't going any further at all.

The Federal Reserve also monitors prices closely to decide whether to hike interest rates. Those rates influence how much people pay for all kinds of credit, and can throw off federal budget projections if they start rising too fast. The Fed also watches a slightly different metric called Personal Consumption Expenditures, or PCE, which capture rural residents as well as indirect costs like employer-sponsored health benefits.

But there's a lot going on underneath the average rate that determines whether any particular individual is paying more, depending on what they typically buy.

https://money.cnn.com/2018/07/13/news/economy/prices-cpi-explainer/index.html

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1. Note: the annualized rate of inflation was 2.9% last month

A 2.9% rise over a single month would be cause for serious alarm. It has been a long time since we had serious inflation in the US economy, and people won't be ready if it happens. Moreover, it is unlikely that wages will keep pace. At least my electricity price is fixed since I have solar PV on my house.