There have been many news stories about high inflation lately, and you may be feeling it when you shop. Rising prices are eating up bigger parts of family budgets, and some necessary items are more expensive than they’ve been in years.

On the other hand, the highest price spikes are on a limited number of items, and they may prove to be temporary. Lower-income workers have seen strong wage gains that are outpacing inflation, improving their standard of living or at least keeping it somewhat steady. Instead of worrying about limited and temporary price spikes, the government should focus on keeping unemployment low, reducing the cost of necessary goods and services like housing and healthcare, even if their costs have begun to even out.

That said, there are a few reasons to worry about inflation.

First, prices can increase faster than wages, making it impossible for some families to pay their bills. While some low-wage workers have seen an increase in pay, this does not apply to everyone. In fact, low-wage workers often wage gains later in an economic recovery than high wage workers do.

Second, faster price increases and higher inflation can become cyclical. If low-wage earners are able to demand and receive higher wages, it raises costs for business which, in turn, may raise prices to compensate if they are unwilling to absorb high labor costs in another way.

Third, high inflation can cause people to change their spending habits in a way that will make inflation even higher. If people are afraid that prices are only going to continue to rise, they may buy things now to ensure they get them at a lower price. This scenario pushes up demand, which raises prices higher and faster.

While all of these scenarios are possible, they have not yet come to pass. Again, price spikes have been limited to a few items, for example, prices for used cars, hotels, and flights spiked sharply in summer when people were anxious to get back out into the world. In winter, prices went up for energy costs and some food items. Rent is increasing, but these increases seem to be concentrated in specific areas of the country, namely the South and Midwest.

Prices for other goods and services have stayed the same or risen only modestly. Healthcare costs for things like doctor’s visits, prescriptions medications, and hospitals have risen less than one percent over the past year. Some food items, like vegetables, are less expensive than they were last year, and the price surge for new household appliances and clothing have started to recede.

Ultimately, this is good news, but, as mentioned, it may still be challenging for low-wage earners. These households spend a disproportionate amount of their income on food and utilities, and they are more likely to rent than own their homes.

But low-wage earners have found ways to compensate. For example, they eat less beef and are more likely to buy processed foods, which are less expensive. While rent has increased as much as six percent in cities like Detroit, Tampa, and Atlanta, it’s less than one percent in Washington DC, San Francisco, Seattle, and New York City.

These workers also saw some improvements when it came to income. Workers in hotels, retail outlets, and restaurants have seen large wage increases, and low-income families received monthly child tax credits and  large stimulus checks. Increasing prices are certainly not helpful, but real incomes for some vulnerable Americans have risen.

It’s also worth considering that rising inflation seems to have been temporary. Price jumps for travel-related expenses have stopped and gas prices have fallen and stabilized. As the global supply chain corrects itself and the effects of the pandemic subside, it opens the door to lowering prices. If federal, state, and local governments devote more money to affordable housing, rental inflation may also decline.

There is also no evidence of higher wages leading to higher inflation as higher prices are not following the pattern of higher wages. For example, restaurant workers have received higher wages in recent years, particularly as the world started to open back up again after the pandemic. But these wage increases were a part of a pre-pandemic trend and restaurants were able to adjust for the increased wages without accelerating inflation. Since 2014 when restaurant wages began to increase, menu price increases have always been below the rate of wage increases.

Finally, there is no reason to think that prices are just going to continue to rise. If this was the case, people would be spending money quickly to ensure they got the best possible price, hoard things like appliances and cars, and shift their investments into things that would offer them better protection against resign prices.

Instead, people are buying fewer big ticket items, likely because they expect the price increases to be temporary, and Americans are not shifting their investments, indicating that they are not expecting inflation to keep rising.

All that said, policymakers should certainly be keeping an eye on inflation, but it is not as concerning as long-term economic issues like expensive medical care, unaffordable housing, and stagnant wages. Unlike the bump in inflation, these issues are here for the long haul, and it will take more work to get them to go away.

Any opinions are those of Thomas Fleishel and not necessarily those of Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.