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The Link Between Inflation and Unemployment: What You Need to Know

Jean Chatzky  |  November 10, 2021

Here's a breakdown of the financial news to keep on your radar this week.

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This Week In Your Wallet: My New Puppy + Inflation, Infrastructure and More Money News

I know there’s been some news this week. Some very important money news. And yet…all I can seem to focus on are puppy videos. How to crate train your puppy. Puppy mistakes you shouldn’t make in the first week. The new puppy survival guide.

Can you blame me? Meet Norman.

new puppy norman

He’s the 9-week-old cockapoo who joined our family on Sunday. No, we’re not sleeping all that much. As my husband (and pretty much every new pet owner) remarked more than once: It’s a good thing he’s cute.  

Meanwhile…if you have any tips, trips, suggestions, panaceas, that will help us get through the night and potty training, we are all ears.  And now, let’s dive into your wallet.

So…how are you feeling about your money?  

Unemployment is down (significantly after last Friday’s jobs report), savings are up (as The New York Times’ Neil Irwin reports, sourcing data from the JPMorgan Chase Institute), “the median household’s checking account balance was 50 percent higher this past July than in 2019,” and wages are rising more than they have in decades. And yet…Republicans and Democrats alike, when asked about the economy, put it on par with, notes Irwin, “the early 2010s, when unemployment was much higher and Americans’ finances were a wreck.”

What’s up with that? Quite literally: Inflation, which is up 5.4 percent over the last year, after years of sitting at around 2.8 percent. It’s causing dissatisfaction with the economy even for people who have seen their wages grow enough to compensate – and despite the fact that in prior years, it cost more of our pay, on average, to buy a gallon of gas (the price of which is up 74 percent since May of 2020). Why the disconnect? Irwin points to the research of Yale economist Robert J. Shiller as one potential explanation. Shiller found people believe the impact of inflation – not just individually, but on society – will be greater than it has, in many cases, turned out to be. The disgruntled will likely soon have more to chew on. Particularly in the Northern part of the US, the cost to heat your home this winter is expected to soar.

Want An Inflation Inoculation? It’s Called An I-Bond

When was the last time you bought a savings bond? Yeah, I’m scratching my head as well. I know my children got some as gifts when they were born. Otherwise, I’m drawing a blank. But, if inflation is concerning you, Series I Savings Bonds (or I-Bonds for short) are worth a look.  Right now (and until the end of April 2022), they’re paying out 7.12 percent interest – the second highest rate they’ve paid in history. That’s many times better than you can get in even a high interest rate savings account. And, like all savings bonds, these are as safe an investment as you can get. Economist Zvi Bodie told, they’re “America’s best kept investing secret…[and should be utilized] by every person with a Social Security Number.”

The trickiest thing about I Bonds is buying them. You need to open an account with Treasury Direct. Then, electronic purchases are limited to $10,000 per year per person. You can buy up to another $5,000 in paper bonds with your federal income tax refund. You can’t cash them in during the first year, and if you cash them in during the first five, you lose three months’ worth of interest. They have a full term of 30 years.

One Price Not Rising? Health Insurance on the Exchange

If you get your health insurance through, it’s that time again – open enrollment.  But as the Kaiser Family Foundation reminds us, every year the process is a little bit different.  This year, the changes are positive, with a longer open enrollment window (it started November 1 and doesn’t wind down until January 15, 2022), more plans to choose from in many states, and pandemic-related subsidies covering more of the cost for millions of people. 

One thing you shouldn’t do? Just punt and re-up for the plan you chose last year – something about 40 percent of participants have done in years past. By doing so, you may not get the best priced plan for you – and you may miss out on valuable subsidies. If, after looking at the options, you’re not sure which choice to make, clicking here can help you find a free navigator – someone trained to assist in choosing the right plan for you.  

P.S. If you get your health insurance via your employer, you shouldn’t necessarily default to last year’s option, either. Take the time to explore what’s on the menu and consider whether a high deductible plan with a Health Savings Account (HSA) may be the right choice for you.  

Have a great week,


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