The consumer price index is a measure of inflation and an indicator of the cost of living. In general, economists agree that 2% inflation is ideal, and to that end, the Federal Reserve changes interest rates to influence markets towards that goal.
Current projections show inflation increasing well beyond that, likely settling at around 6% by the end of the year. Supply chain issues – not least of which is the Russian invasion of Ukraine – have increased prices, while generous government spending has made the dollar comparatively less valuable. All of this together means that people’s money doesn’t go as far.
High inflation generally translates to higher costs for most goods, but this is not necessarily the case in the construction industry. Commodities prices are much more volatile and can be affected by anything from wildfires to winter storms to depleted stockpiles. Prices for goods like aluminum or PVC tend to be affected by specific circumstances rather than inflation. Wages, meanwhile, resist inflation in the short term as workers are paid fixed rates for the duration of a project.