WALTHAM, MASSACHUSETTS (CBS) – “Meat is above and beyond, right?” Fadia Chamoun of Lexington, Massachusetts, wailed as she filled her trunk with groceries. “It has risen through the clouds. Everything has gone through the roof and it’s extremely sad. “
If it seems that lately everything is more expensive, it is because it is.
“Government [just] published that prices in the last 12 months have increased by 5.4% and that marks the fifth consecutive month of price increases of more than 5%, ”explained Jay Zagorsky, professor at the Questrom School of Business at Boston University. “That means that roughly every 14 or 15 years, all prices double. Everything is twice as expensive if this continues. “
Price increases have particularly affected certain industries in the last year. Used car prices are up 24 percent. The cost of meat has increased 12 percent in 12 months. Home heating oil is estimated to be up 43 percent. Another area on the top of many travelers’ minds: gas prices, which have risen by more than $ 1 per gallon.
“Now that a lot of people are going shopping again, a lot of people are traveling again, we want to spend that money,” Zagorsky explained. “But the articles are just not there.”
Experts attribute the price increases to the residual effects of the pandemic: labor shortages and supply. In essence, manufacturing is trying to catch up with skyrocketing demand, leading to soaring prices.
So what can be done to lower the cost of living while we wait for the supply to catch up? “The Federal Reserve may have to start raising interest rates,” Zagorsky explained. “Raising interest rates will reduce inflationary pressures, but it also means the party is over … there just won’t be many people bidding on homes once interest rates go up.”
“There is a kind of balance here,” he explained. “The bottom line is that the government has some control over inflation, but there are no easy options.”