PHOENIX — The price of food, gas, homes and other goods is expected to keep rising or stay elevated for the next six to nine months as inflation reached a 30-year high, according to a Valley economist.
U.S. consumer prices jumped 6.2% in October. In the Phoenix metro area, that increase was even bigger at 7.1%.
Increased demand for goods and the global supply chain backlog are the causes of the spike in prices, said Rick Merritt, economist, president and co-founder of Elliott D. Pollack & Company.
“There’s too much money floating in the economy and not enough goods to satisfy the public,” he said. “Savings rate is much higher than it has in the past, people aren’t going on vacations and the stimulus checks helped add money that is driving the demand.”
Less for your buck
In the last year, the price of a gallon of milk went up 28 cents. A pound of ground beef climbed 66 cents.
Gas prices rose 49.6%, $1.23 more a gallon, and the cost of a used car or truck increased 26%.
“We don’t think it’s going to be a quick turn-around,” Merritt said when asked how long the price hike will last. “We may be looking at inflation continuing for the next six to nine months at the very least.”
In October, 531,000 new jobs were added and the unemployment rate dropped to 4.6%.
More people need to be added to the economy’s workforce to help “straighten” things out, Merritt said.
Currently, goods are arriving from overseas faster than they can be unloaded and set out around the country. That is causing a domino effect in almost every aspect of the economy.
“Usually, we would set like $100 for food and stuff and before we would get a lot of food with $100 and now it’s a little bit of items for the $100 budget that we would set,” said Zuleima Mosqueda as she walked out a grocery store Thursday.
Mosqueda bought cheese and tortillas and said the prices were higher than she remembered them.
What can families feeling the price pain do?
With the holiday season approaching, Merritt said spending where needed and cutting back when necessary are two things people can do to get through the rising prices.
In Phoenix, food prices rose 3.8% in the last year. Energy prices jumped more than 23%, largely as the result of an increase in the price of gasoline, the U.S. Bureau of Labor Statistics reported.
The White House released $17 billion from the just-passed infrastructure bill to help with inflation.
“All year we set money aside, more money that was going to go for the gifts,” Mosqueda said. “Now we are going to use it for the tamales and the champurrado and all that type of stuff, and less gifts, not everyone is getting gifts this year.”
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