How to Talk About the Economy in English
It's common these days to see many news stories about the local and global economy. Unfortunately, it's often because prices are going up!
This article will explain some common English words and phrases you'll read and hear relating to the economy and people's financial situations.
Everyday Words and Phrases for Discussing the Economy
Necessities
Since this word is related to "necessary," perhaps you can guess that it refers to essential items everyone needs — things like food, clothing and shelter.
You should take care of necessities before spending money on things like entertainment.
Non-essential purchase(s)
"Non-essential purchases" are the opposite of necessities — they are things that are not needed to live.
When people have less money to spend, non-essential purchases, such as subscriptions to streaming services, are often the first things they cancel.
Disposable income
"Disposable" is an adjective describing something that can be thrown away. It's often used for items that can be used once, like disposable cameras and disposable shaving razors.
When talking about the economy, "disposable income" is money people have to spend on things that aren't essential to daily living.
I love visiting foreign countries, so I spend most of my disposable income on travel.
Staple
"Staple" is another word for "necessity," though it usually only describes basic foods like bread, milk and eggs.
Due to inflation, shoppers have seen the prices of staples rise sharply in recent months.
Recession
A recession is a "period of temporary economic decline." In other words, it's a short time when the economy isn't healthy. This comes from the verb "recede," which means "to slowly move backwards."
Fear of a recession is causing people to spend their money more carefully.
Strong public spending is a sign that a recession may be ending.
Depression
When a bad economic situation continues for a long time, it changes from a "recession" to a "depression."
The Great Depression, which lasted from 1929 to 1939, had a major impact on many countries around the world.
(Of course, "depression" can also refer to an emotional state of deep sadness. If someone you know is depressed, you should offer them your support.)
Hike
When you hear this word, you might think of a walk through a forest or up a mountain, but "hike" also has another meaning — a "hike" in prices means the prices go up.
Due to a rise in supply costs, the company announced a price hike to go into effect next month.
"Hike up" is used as a phrasal verb.
My local grocery store hiked up the prices of all fruits and vegetables last week.
Related article: New to Phrasal Verbs? Start Here!
Soar
The basic meaning of "soar" is "to fly."
The jet soared through the sky at incredible speed.
But things like popularity, followers on social media and even prices can "soar" as well. In these cases, it means "to rise dramatically."
Gasoline prices have soared over the last 12 months.
Purchasing power
"Purchasing power" is how much people are able to buy with their money. This term usually refers to large groups of people instead of individuals.
In some developing countries, the purchasing power of the population is slowly increasing.
High inflation leads to less purchasing power for consumers.
Pass along/onto (consumers)
When it costs a business more money to provide a product or service, it might be necessary for it to raise the prices it charges customers. In cases like these, we say that the business is "passing along" the higher cost to buyers.
Businesses are trying new strategies to avoid passing rising costs onto their customers.
Budget
"Budget" is both a noun and a verb.
As a noun, it refers to a plan that specifies how much money a person or organization is able to spend.
The manager has to approve our division's budget for the year.
When our son was born, my wife and I had to make big changes to our household budget.
If something is not affordable, we say that it's not "in the budget."
A new TV isn't in my budget right now, unfortunately.
If there isn't much money available to spend, we say that a budget is "tight."
I'm on a very tight budget until I find a new job.
As a verb, "budget" refers to using money for a specific purpose.
The company is budgeting a big portion of money for its marketing strategy.
Cost of living
"Cost of living" (sometimes shortened to "CoL") refers to how much money is needed for basic things like housing, food and transportation in a particular area.
Before moving to Spain, I did a lot of research on the cost of living there.
Major cities like New York and London often have a much higher cost of living than smaller areas.
Uncertainty
When you're uncertain about something, it means you don't completely know or understand it.
The noun form "uncertainty" is often used when talking about an economic situation that makes people confused and worried about what will happen.
Because of the economic uncertainty, shoppers are spending less money on things like movies and eating out.
Wrap-up
Many people would agree that along with good health, strong finances are important for a comfortable life. However, global events can have a big impact on how much money people have and how much that money can buy.
Whether you're reading about the economy in the news or discussing finances with others, you'll be more prepared after learning this list of vocabulary.
If you'd like to discuss money topics in a real conversation, search for an Engoo tutor with expertise by typing "economy" in the search bar.
