High Country Times

Inflation is the highest its been in the past four decades, according to the U.S. Department of Labor, making it harder for families in North Carolina and across the country to afford basic goods.

The DOL's Bureau of Labor Statistics (BLS) reports that the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6% in January. The increase is a continuation of an upward trajectory that saw the index spike 7.5% from January to January 2022, the steepest year-over-year climb since February 1982, according to the BLS report released Feb. 10.

"Increases in the indexes for food, electricity and shelter were the largest contributors to the seasonally adjusted all-items increase," the BLS stated in the report.

The Associated Press reports the inflation spike over the past year is a straightforward case of demand being greater than supply; mainly, a nation flush with cash but nowhere to spend it, thanks to the lingering effects of the COVID-19 pandemic.

"Shortages of supplies and workers, heavy doses of federal aid, ultra-low interest rates and robust consumer spending combined to send inflation leaping in the past year," the AP reported Feb. 10.  "And there are few signs that it will slow significantly anytime soon."

Bloomberg economists Anna Wong and Andrew Husby agree with that forecast. They are predicting inflation to peak around 7.8% in next month's report, Bloomberg reports. "We expect inflation to get worse before it improves," they wrote in a statement released Feb. 10. 

Bloomberg reports also that its economists have found the price increases to extend beyond pandemic-impacted goods, such as cars and groceries, to services like insurance and rents. The AP reports in January alone, apartment rental costs jumped 0.5%, electricity costs rose 4.2% and used-car prices spiked 1.5%, a staggering 41% increase in used-car prices in the past year, the AP reports. 

Although wages are rising at the fastest pace in 20 years, according to the AP, wage gains are being wiped out by the increase in the costs of goods and services. 

The AP reports economists at the University of Pennsylvania’s Wharton School estimated that the average household had to spend $3,500 more than in 2020 to buy an identical basket of goods and services, compared to the previous year's prices.

The Wharton estimates and the resulting strain on family budgets was acknowledged by North Carolina congressman Greg Murphy, Republican for the state's third district, in a social media post. 

"Inflation remains a top concern for families here in Eastern North Carolina," Murphy posted to Twitter Jan. 26.

The spike in labor and products costs have cause some companies to raise their prices. The AP reports that Starbucks and Chipotle have hiked menu prices by as much as 10% to offset the rising costs.

McLaughlin & Associates, a conservative-leaning polling and research organization favored by former president Donald Trump, released the results of a poll that shows respondents expressed greater concern over economic issues than they had in similar polls from 2021. The group reports that in a poll conducted this past January, 31% of respondents stated their greatest concern was the U.S. economy, compared to 25% of respondents in March 2021. Concerns over social issues remained relatively steady: 22% of respondents said they were concerned with social issues in 2021; that number was 23% in 2022. 

The same poll reports that 57% of those surveyed said they disapprove of President Joe Biden't job performance, while 41% approve.