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The December CPI (consumer price index) was in line with expectations. The BLS (Bureau of Labor Statistics) reported December consumer prices were 6.5% (6.5% expected, 7.1% previously) higher than a year ago.
Annual core inflation (which excludes food and energy prices) was 5.7% (5.7% expected, 6.0% previously). Inflation is slowly coming down, but is more persistent than the Fed desires, is still high and is a long way from the target of 2.0%.
Although on average consumer prices were 6.5% higher than a year ago, there is much variation for individual categories. Food prices were 10.4%, energy prices 7.3%, new vehicles 5.9 % and shelter 7.5% higher than 12 months earlier.
Variation among individual item prices is even higher. Prices of eggs were 59.9%, margarine 43.8%, fuel oil 41.5%, butter 35.3% lettuce 24.9% and flour 23.4% higher than a year ago. Prices of nearly everything was higher than the previous year, but there were a few exceptions. Prices of smart phones were 22.2%, televisions 14.4%, bacon 3.7%, beef and veal 3.1% and women’s dresses 3.1% lower than a year ago.
Inflation hurts nearly everyone. Wage inflation was 4.6% in December, but the cost of living increased 6.5%. Workers earning an average wage lost 1.9% in purchasing power. Anyone holding cash lost the full 6.5%. Inflation causes currency to become a depreciating asset. As central banks raise interest rates to fight inflation, business profits, new investments and hiring declines, harming the current economy and economic growth.
Most are predicting a recession this year. Estimates of its severity vary widely. But, regardless of the severity of any recession which develops, domestic and geopolitical uncertainty will still guarantee a volatile year. However, in the kingdom, we have a source of stability, strength, guidance, hope and supernatural help.
The kingdom minded will take advantage of opportunities. When the economic environment changes, demand and supply changes will create new opportunities. For the insightful, economic turmoil can create the greatest possibilities. Those with a kingdom perspective will use this time to grow closer to the Lord by digging deeper into the Word, fasting and prayer and following the guidance of the Holy Spirit. The Lord can use the opportunity to expand our capacity, to widen our reach and to move us to another industry or career to which we were truly called if necessary.
Those with a kingdom perspective are not controlled by the environment. God is their source, and He is in control. All things work together for our good because we love God. When sold as a slave, Joseph received a position of trust with Potiphar. When falsely accused and put in jail, Joseph received a position of trust with the jailer until God’s timing for promotion arrived. Our relationship with the King of kings determines our future. Use trials to move closer to the Lord. Victory is assured. After all, we are sons and daughters of the Most-High God. We have the Holy Spirit of the living God within us. All things are possible
“And we know that God causes all things to work together for good to those who love God, to those who are called according to His purpose,” (Rom. 8:28 NASB).
- The principles of the kingdom
- The duties, responsibilities, and rights of citizens of the kingdom
- Faith, repentance, and the power of the Holy Spirit
- The necessity of a vibrant and growing relationship with the King,
- The promises of God, and
- The privilege of being the King’s representative.
“Consider it all joy, my brethren, when you encounter various trials, knowing that the testing of your faith produces endurance. And let endurance have its perfect result, so that you may be perfect and complete, lacking in nothing,” (James 1:2-4 NASB).
Dr. James Russell is a professor of economics at Oral Roberts University.