Transcripts

"Money File"-Inflation's Indelible Impression on the Economy

SUSIE GHARIB: In the "Money File" tonight, it looks like inflation is here to stay. So says Chuck Jaffe, senior columnist at Martketwatch.

CHUCK JAFFE, SENIOR COLUMNIST, MARKETWATCH: Like it or not, it's time to admit that the economy's problems have hit you at home. There's the unavoidable specter of inflation and higher gas prices, the subtle changes made by credit card issuers to tighten credit, raise rates and fees and there's the declining value of your home. It's not just the proverbial other guy who's been affected. A recent survey from zillow.com showed that nearly two-thirds of U.S. homeowners believe their home's value has increased or remained stable over the last 12 months. That's nice thinking, Pollyanna, but Zillow's market research shows that more than three quarters of U.S. homes actually lost value in the last year. Countless other studies have shown that until people feel the pinch in their own wallet, they won't admit how serious economic problems are. Gas prices got high enough to change habits and home heating costs may do it again this winter, but only to a point. People look for temporary transitions, rather than more permanent, life-altering, money-saving changes. Wishful thinking is not a bad thing, but it won't make ends meet or protect you from job loss, down years in the stock market, higher prices or the day-to-day headline risks out there. While the economy and the stock market will improve, it's well past the time when the average consumer should examine how the economy is changing their lives and how best to react. If you think your household has been mostly immune from the nation's economic problems and don't react now, you're likely to pay for that hubris in the future. I'm Chuck Jaffe.