It’s an expected part of the economy, but right now we’re experiencing the highest peak in 30 years.
ST. LOUIS – It seems no matter how priced you shop, 2021 is right Dear.
That’s why you’ll hear a lot about inflation, the economic term for when prices go up and the value of money goes down.
Remember when that $ 2.50 bottle of soda was used for a nickel? Inflation over time is a natural part of the economy, but what we are seeing right now is inflation over a short period of time. In fact, we are experiencing the highest annual peak for over 30 years. Prices for consumers jumped 6.2% in October 2021, compared to October 2020.
RELATED: US Consumer Prices Soar 6.2% Last Year, Most Since 1990
“It’s more money chasing too little property,” said Bill Vogt, economics teacher at Parkway North High School. “When we have more demand than there is, a supply of these products will drive up the prices because people want to buy these products.”
More money, he says, because many people spent less when COVID-19 arrived and in some cases were able to save. Too few goods due to supply chain disruptions caused by the pandemic.
RELATED: Why Everything Is Getting More Expensive
âWe are seeing a backlog in the ports. We are facing transport distribution problems all over the world, but also within the country itself, as we are facing a shortage of manpower and increased transport costs, âhe said. said Vogt. “These things all contribute to an almost perfect storm of things to coincide and bring us this extraordinary rate of inflation.”
When every dollar is worth a little less, it takes more to equal the value of the thing you want to buy. It’s time to ask the boss for a 6.2% increase if you want to follow the prices. But for most people, that means a budget that just doesn’t go as far as it did around the same time last year.
RELATED: Do You Buy These Regularly? Here’s how much more expensive they are with inflation
So when will our wallets feel some relief?
âThat’s the million dollar or billion dollar question that you know economists are trying to predict,â Vogt said. “Is this going to be just a temporary bump like they planned?” Or is it going to be a longer term disruption? “
The other big question: what can be done about it? Some economists say it’s best to wait and things will improve when the pandemic ends. The government can also raise interest rates, or adjust and reduce its spending. The Biden administration is currently pushing Following urgent spending in the country’s ports to try to resolve supply issues, which could be particularly strained before the holidays.