Every 10 years or so, inflation pops up and becomes a popular topic among the financial pundits. But any inflation that has occurred for the last several decades proved to be very temporary. In fact, inflation hasn’t been a real problem in 40 years.
In October, the inflation rate, as measured by the Consumer Price Index, rose to 6.2%, the highest year-over-year inflation in 31 years. It was also the sixth straight month of inflation growth of more than 5%. Many believe the numbers will only get worse in the months ahead.
People are back to work for the most part, and the consumer is back in business. But aside from the economic recovery there’s something else. The federal government has pumped about $6 trillion into the economy in relief since the start of the pandemic, and there’s more on the way.
Oil and gas are essential commodities, the prices of which tend to outperform inflation. Energy companies tend to thrive during times of inflation as the price of oil and gas tends to rise a lot more than the costs of extracting it and bringing it to market.