Inflation affecting the families of Lake Norman; Perspectives Concerns Expert
DAVIDSON, NC – Families are adjusting their budgets and tightening their belts as the cost of essentials such as gasoline, groceries and clothing increases due to inflation.
Lisa Black, a retiree from Huntersville, says she began to dread shopping. “I went to the grocery store yesterday,” Black said. “I had a small bag of paper items and a plastic bag of cold items, about 12 items. It was $ 90,” she said. ” I am retired ; it’s going to impact everything in my life. “
Black isn’t the only person looking at their budget and learning about inflation, which is the general increase in the cost of goods and services. “My daughter didn’t understand the word inflation, so I told her last year to fill my car with gas, it cost $ 27, and now it costs $ 48. Then I showed her in a grocery cart what $ 21 would buy, “said Debbie Ericson of Corneille. The answer, of course, not much. “
There are mitigating factors when analyzing individual goods and services to examine the root causes of increases or inflation.
For example, AAA explains that the cost of gas nationwide has fallen over the past five weeks. Those watching the market will be closely watching crude oil inventories and the impact of the omicron variant of the coronavirus on gasoline demand. According to AAA, gas prices were lower in 2020 due to lower demand due to the pandemic and people traveling less.
For grocery costs, supply chain issues cripple the normal path from manufacturing, shipping, and distribution. Food prices are expected to continue to rise in 2022, according to the Bureau of Labor and Statistics, and they are already more than 5.4% higher than last year.
The prices of individual items such as baby food topped 8%, and the Bureau of Labor and Statistics reports that eggs are up more than 11% from last year.
It’s a trend that Davidson College economics professor Vikram Kumar said should alarm people. Kumar is internationally respected for his expertise in global finance and economic thought.
“Inflation is an unwanted guest that shows up and doesn’t want to go,” Kumar said. “We really haven’t had a significant case of inflation since the early 1990s.”
It’s a concept not many people under 35 are familiar with, just like Ericson’s daughter.
“We have had more than a generation of Americans who grew up with little inflation,” he said.
Kumar says inflation is insidious, creeps into all aspects of consumer affairs, and has multiple causes.
“COVID-19 has created shocks on the supply side,” Kumar said. “You’ve probably read about the shortage of semiconductors and microchips that causes a number of shortages where supply can’t meet demand. It’s an example of how the pandemic has interrupted the offer of the economic system. “
When asked if he was concerned about the current trajectory of inflation, Kumar said yes.
“Once inflation takes hold, it is very expensive to uproot it,” Kumar said. “Because to undo it, you have to put the economy through a phase of recession. It is orthodoxy. So I think we shouldn’t be optimistic about the current state of affairs. I don’t hear the degree of worry that I would like to. “
President Joe Biden has publicly stated that his administration and the Federal Reserve believe the current inflation problems are “transient” in nature, or as a phase after the bulk of the pandemic is hopefully over.
Kumar criticizes this idea because he believes there could be a long-term economic change that the presidential administration and the Fed are not sensitive to. In other words, he thinks it might not be a phase at all.
“Public figures have tried to shape expectations by saying that the inflation we are seeing is transient,” Kumar said. “But at some point, when does the transient become non-transient? ”
Families hope locally that this is only transitory.
“When people facing a medical crisis or disability have to spend much more on gasoline, food and utilities, then they must start eliminating the very things they depend on for good health and maintenance. health issues, ”Black said. They will then be faced with difficult choices. “Food or medicine? ”