U.S. inflation reached a 6.2% annual rate in October, a three-decade high, and several experts are saying things will get worse before they get better.
A deeper dive into the numbers shows the consumer price index, which measures what consumers pay for goods and services, increased at the fastest annual pace since 1990. And inflation was greater than 5% for the fifth straight month. Broad based price increases included several food categories, new and used automobiles, energy, furniture, rent, and medical care.
Research shows several economists believe the United States is entering a six-month period of unusually high inflation – at least. Several factors are cited as reasons including COVID affects, supply chain issues, higher than normal consumer demand, and labor shortages causing pressure on wages causing companies to raise prices to offset labor costs.
As you might guess, officials at the Federal Reserve are watching the situation to determine whether these factors are temporary or longer term. Their reaction will be based on several things including consumer expectations of future inflation.
One additional interesting thing to note, according to the National Federation of Independent Businesses, 53% of small businesses raised prices in October. Their surveys showed business owners said this was a necessity for a variety of reasons.
In the Cape/Jackson metro, we are not immune to these trends. Our local business owners and consumers are struggling with the same issues. Let’s all hope 2022 brings some better news for all of us.
