The Great Inflation: What’s causing prices to skyrocket?
JACKSON, Miss. (WLBT) - Lindsey Beckham of Madison might be what you call a super mom. She’s a widow with five children, all under the age of 13. Her degree is in the medical field, but right now, getting a job and paying for childcare is impossible.
“We have been basically living off my late husband’s social security. But we’re penalized for that,” she says. “They tell me if you make so much more than (a certain amount), we will cut the Social Security, so we have to weigh the benefits and the options.”
They had been getting by OK until inflation began to skyrocket late last year.
“When you’re spending so much more just to put groceries in the cabinet and gas in the car, that makes it much more difficult to pay your bills,” Beckham adds.
Inflation has gone from bad to worse. New numbers out from the Labor Department in mid February show the consumer price index rose 7.5 percent in January from a year ago. That’s the fastest increase since February 1982. It comes off a year that ALSO saw a historically high price increases.
In the grocery store, it’s undeniable. According to NBC news, the price of a gallon of milk rose 20 cents in the past year. A carton of eggs is up 31 cents on average. A pound of ground beef is up almost 60 cents. That may not seem like much, but it’s just a snapshot of the higher prices in the grocery aisles.
“It’s as much inflation as we’ve seen in quite a long time, says Corey Miller, State Economist and Director of the University Research Center.
Miller says we’ve had a perfect storm for inflation. First, COVID-19 shut down the economy. It led to pent-up demand when things re-opened. Federal government assistance programs triggered consumer spending, and interest rates as low as zero triggered even more. The result has been higher prices everywhere, including the gas pump, where the price you pay rose 36 percent in 2021.
“In Mississippi the gas prices hit us harder than in other states because, as a rural state, people have to drive everywhere, and lower income people have to spend a larger portion of their income on things like gasoline, food and housing,” Miller tells us.
People are looking to President Biden for answers.
In January the President stated, “The bottom line, if price increases are what you’re worried about, the best answer is my Build Back Better Plan.”
But there are concerns that more government spending right now would send inflation higher.
A Washington Post article published in January stated, “Washington poured gasoline on (the inflation) fire by enacting the 1.9 trillion dollar American Rescue Plan. This surge in spending is a key driver of higher prices faced by consumers.”
The American Rescue Plan included assistance checks for Americans.
The checks are no longer going out. And to further ease inflation, the Federal Government is expected to raise interest rates several times in 2022.
Even so, Miller says, the projections he’s seen suggest the process won’t be a quick one.
“They do think the first quarter of the year will be the worst. We may hit a peak... in terms of the rate at which prices are increasing, and then maybe slow in the second half of the year.”
And while there’s not much consumers can do except spend less, Beckham recommends this step for you and me.
“Get involved. Call your legislators,” she says. “They work for we the people. And they need to know that this is hurting we the people.”
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