ATLANTA — The Federal Reserve plans to meet Tuesday and Wednesday to discuss raising interest again in efforts to slow inflation in the U.S.
And while record-level inflation numbers continue to make headlines at home, there's a broader online debate about which country has it worse.
THE QUESTION
Is inflation worse in other countries compared to the U.S.?
THE SOURCES
- The Consumer Price Index from the U.S. Bureau of Labor Statistics
- Data from Trading Economics, an international financial analysis tracker.
- Economist Tom Smith, professor of finance at Emory University's Goizueta Business School
THE ANSWER
Yes, it's true. More than 100 economies worldwide are experiencing worse inflation than the U.S. right now. But for further context, the United States ranks largely in the middle when comparing inflation to many of its counterparts in G20 countries.
WHAT WE FOUND
As of the latest report, the inflation rate in the U.S. remains high at 8.2%, according to the Labor Department's Consumer Price Index, which measures how much Americans pay for certain goods and services.
Meanwhile, Europe hit a new record this week, reaching 10.7% in October.
"A lot of the inflation in parts of Europe is being driven by very, very high energy costs that are resulting from the conflict in Ukraine and Russia, and the squeeze on countries in terms of paying with Russian currency, very, very expensive," Tom Smith, economist and professor of finance at Emory University, explained.
Smith said the impact of the war in Ukraine continues to hit other parts of the world more significantly than the U.S. Meanwhile, other factors influencing inflation, like the pandemic, continue to have a global reach.
"We're all experiencing the same phenomenon, which is, you know, the supply chain disruptions that are leading to inflationary pressures," he said.
While all economies are unique, much online debate is about how inflation in the U.S. compares to the rest of the world. A breakdown by Trading Economics analyzes the latest economic data, including the inflation rate, and shows the U.S. ranking 107 among other countries.
So yes, it's true that more than 100 countries have worse inflation rates than the United States. However, data from G20 countries further illustrates the United State's largely middle position, with the U.S. experiencing higher inflation than countries like Japan, France and Canada but performing better than the U.K., Germany, Russia and Turkey.
While some argue it's not fair to compare different countries' inflation rates, Smith disagrees, as long as the comparison is consistent.
"There are much, much higher costs for some commodities and that would that would certainly lead some people to say, well, you can't compare these things," Smith said, "But as long as you're keeping your basket constant, you can track the price of the goods in those basket over time and get a rough estimate of inflation."
Ultimately, he points out the U.S. is one part of the puzzle, given we live in a global economy.
"The truth is that those inflationary elements in other countries are going to affect or impact our inflation because we rely on products from other countries as components in products that we use in the United States," Smith said.