The Washington Post November 10 at 1:53PM “Inflation in today’s economy is different.” By Alyssa Fowers and Rachel Siegel.
Read The Washington Post for all the details
Summary offered by 2244
Figure from The New York Times November 10, 2021
Data presented in charts.
From October 2019 prices for meat, poultry, fish and eggs have increased 19%, cereal and baked goods 7%, dairy 6% and fruits/vegetables 6%.
Year over Year changes in the consumer price index by month, seasonally adjusted, typically ranged from 1-2% between October 2019 and February 2021. Since then CPI increased and has been at about 5% since April and October’s report has the increase at 6.2%.
Currently energy costs account for most of the inflation being nearly more than food, shelter, used vehicles and other combined.
Compared to October 2019, Rental car prices jumped 68% while used vehicle prices increased 58% and new cars 12%.
What’s driving these price increases?
Supply-chain issues and the delta variant reportedly “have kept prices elevated.” Earlier thinking was that inflation was just a temporary blip. Supply-chain shortages, especially the “global microchip shortage” have impacted vehicle costs. Gasoline costs have surged nearly 50% from October 2020. Rental car companies sold off inventory earlier in the pandemic and then didn’t ramp-up quickly enough when Americans, having been in lockdown, took to the highways to safely get away. This led to much more demand than supply driving up rental car prices and putting more pressure on new vehicle supply as well.
When will inflation ease up?
“There is no clear answer…”
Looking at the CPI data inflation ebbed back slightly in July and August but then shot up slightly in September and now sharply in October. Month to month data can be challenging to interpret but “the overall picture suggests that inflation is sticking around longer than...anticipated.” For sure prices are much higher too for hotels, airlines and cars but the “federal data…[now]...show ‘broad-based’ higher prices” for energy, used cars, shelter, food, new vehicles, medical care, furnishings, operations and recreation. Experts are concerned that increased costs for housing will remain after the pandemic. As for meat prices “the White House has pointed to broad consolidation in the meat industry” as a contributing factor “for pushing prices higher.” Industry experts point to “supply-side issues...because it costs more to transport and package materials, while labor shortages have held back meat production.”