Expect Some Good News on Inflation, Some Bad

How the IRA Could Affect You | Great Deals on Family Friendly TripsGreat Deals on Family Friendly Trips | Created for {EMAIL} | [Web Version]( August 8, 2022 CONNECT WITH KIPLINGER  [LinkedIn]( [Facebook]( [Twitter]( [Instagram ]( [Youtube]( [SIGN UP]( ⋅ [WEBSITE]( [] What's in the Works [] Expect partial good news in the government report on consumer prices due out on Wednesday. Average total prices will likely be close to unchanged for the first time in eighteen months. But credit will mostly go to the [falling gasoline prices]( that consumers have been able to observe at gas stations over the past month. Most other prices will still show a strong trend, however. Wage growth is still hot at 5.2% for all workers and 6.2% for non-supervisory workers. More businesses are having to boost wage rates beyond their normal range in order to attract and keep workers. Businesses like nursing homes, where worker burnout is high, still see their labor shortage worsening, not getting better. The moderating price trend in energy should continue through August, at least, and may be joined by softening food prices. Prices of staples such as bread, milk, cheese, and coffee appear to be easing. The price of groceries has surged over the past year and may finally be getting a break. But despite these improvements, the yearly inflation rate for all prices is likely to end the year still about at 8%. The rate will drop next year into the 3%-4% range. While many prices will remain high, consumers may find some relief just from the relative stability. [LinkedIn]( [Twitter]( [Facebook]( [Email]( [Link Your Finances Win A Tesla]( 1. Sign up to get access to our free dashboard and tools 2. Link all of your eligible accounts for up to 20 chances to win 3. See your chances of retirement success with our Retirement Planner [READ MORE]( ADVERTISEMENT [] Continued [] Strong wage growth in July will likely keep the Federal Reserve on track to raise interest rates at their next meeting on September 21. There has been speculation that they would raise a large three-quarters of a percentage point, but the lower consumer price index reports for July and August should enable them to stay at a half-point raise. If the strong [jobs reports]( keep coming, then interest rate increases will continue at a brisk pace, but there have been hints in the most recent reports of weakness in household employment, which includes more informal work. As the economy slows down, businesses will likely turn more cautious on hiring, but for now, any slowdown is just enabling more businesses to fill more jobs that had been going begging. With congressional Democrats on the cusp of passing the Inflation Reduction Act, don’t lose sight of how the bill might impact your [finances](. Here are a few examples: First, the bill won’t raise taxes on small business or middle-income families (those making $400,000 or less) at least in its current form. But it will increase the tax burden of some large businesses by imposing a 15% minimum corporate tax. Second, the bill will extend expanded eligibility for Affordable Care Act premium tax credits through 2025, allowing more individuals and families to benefit from lower health-care premiums. (Another provision allows Medicare to negotiate prices for certain prescription drugs.) Third, it extends tax credits for folks who purchase rooftop solar panels, energy-efficient appliances, electric vehicles and more by another 10 years. And last, but not least, the bill boosts funding for Internal Revenue Service enforcement by $80 billion over the next decade. All have the potential to affect you, either directly or indirectly. Free download, [The Kiplinger Letter's Forecast](. No information required from you. [LinkedIn]( [Twitter]( [Facebook]( [Email]( [These Are the Top Financial Advisors in the US]( Hiring the wrong financial advisor can wreak havoc on your retirement and can potentially cost a big chunk of your savings. [READ MORE]( ADVERTISEMENT [] Also on Kiplinger [] - [Great Deals on Family Friendly Trips]( - [The 25 Cheapest U.S. Cities to Live In]( - [‘I Can’t Retire – I Need Health Insurance’]( - [Are You Streaming Too Much? What the Discovery+/HBO Max Mashup Means]( - [Sign Up for Kiplinger's Free Tax Tips E-Newsletter for Money-Saving Tax Planning and Compliance Advice]( ABOUT KIPLINGER When we write about money, we get it right. So the decisions you make with your dollars are also right. 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