Prices are up 3.6% in a year. Gas costs about $1.20 more

Warm-up

How do you usually get to school or to a friend's house?

• Ride in a car
• Bus
• Walk or bike
• Drive myself

Top story

The government's latest report on inflation says prices rose 3.6% in the year through September, measured by the personal consumption expenditures (PCE) price index. Inflation means the same things cost more than they did before. On Thursday, the report matched what economists expected, so the number was not a surprise. It still means prices are climbing faster than the 2% a year the Federal Reserve aims for.

You can see it at the gas pump. AAA says regular gas averaged about $4.27 a gallon on October 27. At this time last year it was about $3.07. That is roughly $1.20 more per gallon, which hits anyone who drives to school, to work or to a friend's house.

Why it matters to you: If you work for pay, your hourly wage buys less when prices rise faster than your raise. Gas, food and fun all come out of the same paycheck.

Your money

A raise only counts if it beats inflation

Say you earn $15 an hour. If prices rise 3.6% over a year, the same things that cost $15 now cost about $15.54. To keep your purchasing power, which is how much your money can buy, your pay has to rise by at least that much.

Here is how to check. Multiply your wage by 1.036 (that is 100% plus 3.6%). $15 × 1.036 = $15.54. If your raise takes you to $15.30, you got a raise on paper, but you can buy less than before.

When you start a job or ask for a raise, compare the percent raise to the inflation rate. A 5% raise in a year with 3.6% inflation is a real gain of about 1.4 percentage points. A 2% raise in the same year is a pay cut in what your money can buy.

Guess the number

Gas costs about $1.20 more per gallon than a year ago. About how much more does it cost to fill a 12-gallon tank?

Stock of the day

Chipotle CMG +8.9%

Chipotle's stock rose 8.9% on Thursday, closing at $31.28. The burrito chain reported third-quarter results on Wednesday after the market closed. Revenue rose 9.6% to about $3.3 billion, and comparable sales rose 2.1%. Comparable sales measure sales at restaurants open for at least a year, so they leave out growth from new locations. Customer visits rose 0.8%, and the average check rose 1.3%. Chipotle's profit per share was $0.27, a bit below the $0.29 analysts expected.

Pop quiz

Class discussion

Gas costs about $1.20 more per gallon than a year ago. If you drive, what would you change first: how often you drive, how far, or what else you spend on? Why?

Last bell

Alphabet loses about $500 billion in one day

Alphabet, the parent company of Google, fell 12.6% on Thursday after its earnings report, the worst one-day drop in the stock's history. NBC News reports it wiped out about $500 billion in company value. Analysts pointed to the company's spending on AI computer centers, which topped $51 billion in the quarter.

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