What Is Inflation?

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Inflation is one of the most familiar and easily definable economic topics to anyone who has watched the decrease in the purchasing power of their money.

Put simply, inflation is a general increase in prices of goods and services over time.

What causes inflation?

Inflation can be caused by numerous factors, but the two primary types of inflation are demand-pull inflation and cost-push inflation.

Demand-pull inflation typically occurs in a time of economic expansion. During these periods of growth and increased income, consumer demand for products and services will exceed the current supply, driving prices up. This has also been a common cause of inflation during times of war, when materials and manpower are drawn upon by a military effort and therefore are in shorter supply.

Cost-push inflation, as the name suggests, happens when the costs of production rise. This can be caused by a shortage in the raw materials required to make the products people need. For instance, when draught or natural disaster causes crop failure and a subsequent lack of food products, the price of food at grocery stores and restaurants will rise. Cost-push inflation also results from wage increases that aren’t matched by increases in worker productivity and the resulting rise in production costs.

How is inflation measured?

To understand how we measure inflation, we look at two factors: the Consumer Price Index and the “market basket” of goods and services.

The Consumer Price Index is a number that measures the change in the price that an average consumer pays for a predefined market basket of goods and services. This market basket represents all of the goods and services purchased by an average American family and contains roughly 80,000 items in more than 200 categories. Every couple of years the United States Bureau of Labor Statistics (BLS) conducts what’s known as the Consumer Expenditure Survey, the information from which decides what goes into the market basket of goods and services. Through interviews and expenditure diaries, approximately 7,000 participants nationwide log information about their expenditures and their income. Because the Consumer Price Index charts the change in price across such a broad range of products representing the purchases of an average American family, it is the best measurement for inflation that we have.

Can I protect myself from inflation?

During the 1970’s, the federal government built a cost of living adjustment (COLA) into the social security program, so that retirees living on fixed income could keep pace with inflation. Union contracts, government programs, and some corporate pensions have been known to offer a similar benefit. Perhaps the best way to protect yourself against a loss of purchasing power is through investment in assets whose value you expect to increase at a rate equal to or greater than that of inflation.


This article is intended to provide general information and should not be considered legal, tax or financial advice. It’s always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation. Find more helpful articles at practicalmoneyskills.com.

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We are growing!

Imagine the possibilities. At Midwest Community, we are well-known for advancing our employees and promoting from within at all levels of the organization. Take the first step in starting your career and grow with us!

Accounting Manager – Please see the job overview for information.

Float Member Service Representatives – may have days scheduled at any location (Defiance, Bryan, Napoleon). Computer literacy is required and cash handling or banking experience is preferred. Please see the job overview for a list of duties.

Starting pay is $17.44 an hour
$19.62 an hour after 180 days of service
$21.79 an hour after 1 year of service

Resumes may be submitted to Andrew Scharlacken at ascharlacken@midcomm.org.

All are welcome. Midwest Community Federal Credit Union is an Equal Opportunity Employer.

We are growing!

Imagine the possibilities. At Midwest Community, we are well-known for advancing our employees and promoting from within at all levels of the organization. Take the first step in starting your career and grow with us!

Float Member Service Representatives may have days scheduled at any location (Defiance, Bryan, Napoleon). Computer literacy is required and cash handling or banking experience is preferred.

Starting pay is $17.44 an hour
$19.62 an hour after 180 days of service
$21.79 an hour after 1 year of service

Please see the job overview for a list of duties. Resumes may be submitted to Sondra Manon at smanon@midcomm.org.

All are welcome. Midwest Community Federal Credit Union is an Equal Opportunity Employer.

Investment Representative

The primary purpose of this position is to assist Midwest Community Federal Credit Union by delivering outstanding service to both internal and external members. A key element of excellent service is to identify the financial needs of each member and recommend an appropriate credit union solution. In addition, receives members in person and by telephone. Helps Member Investors reach financial goals utilizing our consultative sales process. In addition, responsible for ensuring that outstanding service is delivered to both internal and external members. A key component of this service is to provide proactive guidance on investment solutions via a needs-based consultative selling approach to both current and prospective Members who have placed an inbound call or referral to the Investment Representative.

For more details, please contact lfrysinger@midcomm.org.

Midwest Community Federal Credit Union is an Equal Opportunity Employer.

Member Service Representative

Midwest Community Federal Credit Union is looking for a Member Service Representative to process transactions, accurately perform end of day balancing procedures, follow company policies and utilize the core data processing system and various software applications, including electronic banking services. We are seeking candidates who are punctual, honest, friendly, and have outstanding communication skills. Please see the job description for a full list of duties. Resumes may be submitted to Sondra Manon at smanon@midcomm.org.

Midwest Community Federal Credit Union is an Equal Opportunity Employer.

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