Inflation On The Rise

Overview

Prices are going up! This is clear to see and impossible to avoid in our everyday lives. We hear it on televised news channels, on the radio as soon as our cars start up, on social media while we browse on our smartphones, and of course randomly during conversations with people, because the conversation about inflation is hard to avoid today. There are more people concerned about being under financial stress now than over a year ago. Concerns about inflation are driving tensions about budget concerns and financial choices. According to CNBC Television, there are 48% of Americans that are thinking about the rise of prices all the time. Also, there are 76% of Americans who surveyed that they are worried that higher prices will force them to rethink some financial choices. The way inflation is persisting, there are people who are considering cutting back on dining out, driving, and traveling for vacations.

Inflation is Everywhere Today

The main issue that plays a role in inflation is the supply chain. A supply chain is a system within organizations, people, activities, information, and resources involved in supplying a product or service to a consumer. The COVID-19 pandemic has had a significant effect on the supply chain, and people have run into issues of not being able to buy what they need from stores. When people notice certain goods or products not being available in local stores this causes people to over buy the product once it is found. These actions are performed by individuals with the mindset of “Well you know, just in case,” even though there are others who also need it and you already have enough. In a recent article, it is stated that since there were multiple national lockdowns with the closing of businesses and ports, there have been problems with transporting raw materials and finished goods which disrupts manufacturing. Since manufacturing has been disrupted, in a normal day of grocery shopping, there are empty shelves as you walk down the aisles, and the total price that you anticipated paying has, in some cases, now doubled.

Items are becoming scarce in stores, but there has also been notice of fast food restaurants having a limit to their menus. Maybe, you have noticed that your favorite item on the menu is no longer being served and that the prices on the menu went up more than you are used to. We all hope for a change, so that our pockets do not continue to burn and so that we can have better access for goods and products that we need. A positive change is what we hope for, but with recent research, it is expected that inflation will only heat up.

Yes, the pandemic has impacted the supply chain and how often different products can be available to consumers. However, Russia’s war on Ukraine is expected to have a big impact on the prices we pay and the availability of products also, according to CNN. The world depends on Russia and Ukraine for many things that the economy relies upon. Food prices have been rising dramatically, primarily because of the scarcity and limit of some items. According to the Food Price Outlook, “All food prices are now predicted to increase between 4.5 and 5.5 percent; food-away-from-home prices are predicted to increase between 5.5 and 6.5 percent; and food-at-home prices are predicted to increase between 3.0 and 4.0 percent in 2022.” This is information from the Food Price Outlook that incorporates the February 2022 Consumer Price Index and Producer Price Index numbers that have since seen an increase in the percentage increase reported at that time.

There are many people who depend on going out to eat or getting take-out more than staying home and cooking for themselves and family. With the dramatic increase in fast food restaurant and the food industry prices in general, people are beginning to rethink how they should fulfill their food needs. For some, this is a choice of change, and for others, this is their only option. According to Andrew Barry during a Fox Business segment, “Food prices are up over 8% in the past year and it’s affecting a range of companies. Including restaurants, package food companies, farm equipment makers, and grocery store chains.” He continues on to explain how restaurants and package food companies are mostly absorbing the big price increases, and the importance of Ukraine being a global food supply and their impact. As raw materials and other goods were not being available because of the pandemic, there is now an issue because of the negative effect that the war in Ukraine has had on resources and goods. So, as more issues arise within the economy, this causes businesses and manufacturers to increase their prices. As a result, daily living and managing a budget has become harder and more stressful for individuals.

Along with the price increases of food and products needed in day-to-day life, the price of gasoline is taking a toll on individuals also. The main question that people have is why are the gas prices so high? Inflation is one of the few factors, but according to research and news channels, the invasion of Ukraine by Russia is the main reason right now for the increase on gas prices. WFAA stated, “U.S. oil surged to about $130 a barrel overnight on the possibility that the U.S. could bar imports from Russia due to the conflict with Ukraine.” The rise of gasoline prices has been higher than what we’ve seen in past years. In fact, prices haven’t been this high since 2008, which was the year of the Great Recession. The "U.S. Regular All Formulations Retail Gasoline Prices" graph shows the dollars per gallon throughout the years and proves the increase of gasoline prices from before, during, and after 2008, and to now in 2022. Unfortunately, prices will continue to rise, so people are planning ways to adapt and be able to afford to continue to put gas in their cars.

The U.S. economy has weathered the pandemic relatively well, but the conflict with Russia invading Ukraine has posed new risk according to recent research. The conflict has driven the prices of gasoline and other energy products up, but is now expected to heat up inflation with a global increase in food prices. How should individuals prepare for this increase, and how have businesses reacted to inflation?

As stated earlier in this article, people have planned to cut back on going to restaurants to eat, limited their car rides to reduce gasoline use, and people have decided to not travel for vacations. Inflation has taken a big bite out of people’s budget of living costs, causing decision making with finances very stressful. Businesses have also had to adapt to inflation in order to save their revenue and the amount of business that comes in. They are in the bad spot of having to increase their prices of services, simply due to prices on many products increasing. Rising inflation only has added to the pandemic’s problems. Small businesses are having to pay more for the merchandise that is sold in their stores and/or for the services that they provide. They are also put in a bad spot because business owners now have to explain why their prices are going up right along with everything else during a crisis. Store owners already compete with other businesses that provide the same services and products as them, while now having to compete with inflation also. Customers are paying attention to prices now more than ever, because of having to maintain a budget for all their needs that inflation has negatively affected.

Conclusion

So how do you plan to manage during these trying times? Some may try to develop a green thumb and grow their own produce when they can. If you aren’t a big fan of cooking, this can be the time to learn how to cook, so that you won’t rely on fast food restaurants as often. People may also begin to ride bikes more often to get to places where a car may not be necessary in order to save on gas. Individuals can also learn to style their own hair or give one another a haircut, simply because it may be easier to do it yourself rather than spending more money to have someone else do it for you. Budgeting can be stressful with inflation being a factor, but making better decisions with our money can help more than you know.

Here are some websites that can help update you about what is occurring during Inflation:

• Why Inflation Can Become a Self-fulfilling Prophecy
• Inflation and the policy response in 2022
• Food Prices Are Going Up – and at Levels Americans Haven’t Seen in Decades
• Inflation: Prices on the Rise
• Supply Chain Disruptions Threaten U.S. Grocery Spending

About L’Nysia Johnson

L’Nysia Johnson is a sophomore at Southeastern Louisiana University in Hammond, Louisiana. Her major is in Psychology and her minor is in Criminal Justice.