If it seems like your household expenditures have been increasing in recent months, it’s not just your imagination. According to the U.S. Bureau of Labor Statistics, the Consumer Price Index (CPI) is up by about 5.4 percent over the past 12 months for All Urban Consumers. And experts think that there’s little relief on the way. In fact, according to some investors, they see inflation continuing to eclipse 5 percent throughout the rest of 2021 and then very little relief at 4 percent throughout 2022.
The rise in consumer goods prices is the fastest such in the past 30 years, and even while the Federal Reserve has warned that it was on the way, the numbers have exceeded the Fed’s initial estimates. For the record, the Fed maintains that these cost increases are transitory and will subside after the supply chain has a chance to recover. But when the supply chain will recover is a bit murky. Some believe we won’t see any significant relief until at least 2023. Others think it could be a matter of months – not years – before it occurs.
Why is Inflation so High?
Most experts agree that inflation right now is due to the rapidly recovering economy in the wake of the COVID-19 pandemic. With demand increasing, suppliers are unable to ramp up production to meet what consumers want. The result is a supply chain shortage. We should note that the current labor shortage isn’t helping things. And many of these shortages, such as computer chips from cars, are having far-reaching consequences.
Again, the Fed is quick to point out that while prices are likely to remain high for several months before stabilizing, the economy is recovering as expected.
What are the Most Expensive Items?
Some of the products and product categories that have seen the largest price jumps in recent months include:
- Used vehicles: This product category has increased by more than 10 percent.
- Fuel: This is up by about 2.5 percent, and as President Joe Biden informed viewers at a town hall on October 21, he doesn’t see prices coming down anytime soon.
- Meat, poultry, fish and eggs: These categories of foods are up by about 3 percent in price.
- Vehicle rentals: Needing to rent a car or truck? You can expect to pay 5 percent more than you would pre-pandemic.
- Airfare: With travel demand rising, so too is airfare – and to the tune of about 2.7 percent.
Additionally, we’ve talked quite a bit about the increase in homes over the course of the pandemic, as inventory is low and demand is high. Some reports indicate that home prices rose about 20 percent just this year.
The bottom line is that prices are likely to stay high as long as demand is high and supply chains are recovering. That’s part of the reason why we wrote a few weeks ago about how now is the right time to begin your holiday shopping. How are you managing the changes to your budget?
Since the brainiacs are in charge and using FDR’s formula for our nations recovery the depression should last ten years and then a great war will be started.
I wish fuel prices were only up 2.5%. Gas prices have doubled in south-western Missouri since the election. Food prices up 3%? Where do you buy your groceries? I’d like to shop there. No, prices on gasoline, housing, food and everything else are MUCH HIGHER than your examples and will continue to rise until the democrat/communists have erased the middle class and destroyed the United States.
This is all by design. The U.S. was energy independent when Trump left office. On day 1, Brandon shut down the XL pipeline, Fracking, Oil production leases on Fed. land. The economy went into a tail spin because of this, then Brandon & the cat house clowns opened the border & the economy went from tail spin to free fall at super sonic speed. This is 100% the Brandon admin. fault, & those who voted for them.