There are certain things that are almost impossible to avoid during the holiday season---crowded stores, festive decorations, Mariah Carey songs. This year, there's another one---inflation. Wherever you go and whatever you're buying, it likely costs more. And it doesn't matter if you're in-store or online. A new Adobe report shows online prices have risen for 18 consecutive months, and are now at their highest annual increase in seven years. At the same time, the consumer price index is rising at the fastest rate in almost 40 years.
Everyone can feel it. A recent poll shows inflation and the economy are now the biggest concern for Americans, regardless of political party. "Simple things like meat, eggs and milk cost more than they used to, and I don't think they will drop in price anytime soon," says Zilvinas Silenas, president of the Foundation for Economic Education (FEE). "So for your average person who's not invested heavily into real estate or the stock market, this is definitely not good times."
Silenas tells KTRH the consumer price index is on pace to grow by 9-10 percent this year, but that doesn't even tell the whole story. "Housing prices have gone up by well more than 10 percent, and that's not included in the consumer price index," he says. "So there are many other price increases that are not reflected in consumer price inflation."
As for what is causing the surge in prices, Silenas blames a combination of stimulus money and supply chain shortages. "We have a perfect storm...we have people with money, who want to spend it on products that are not there," he says. "All of that drives inflation."
This week, the Federal Reserve signaled a shift in monetary policy to address inflation, including winding down its bond-buying stimulus program and raising interest rates next year. But there is no quick fix. "I don't think prices of goods will fall significantly in the near-term, but perhaps inflation will stop rising," says Silenas. "That would be my most optimistic feeling for the medium to short-term."
Photo: iStockphoto