DES MOINES, IOWA — You aren’t imagining it: prices for goods are continuing to rise while business owners struggle to find supplies and workers.
According to the U.S. Bureau of Labor Statistics’ monthly report of the consumer price index, Prices for consumer goods across the United States have risen by an average of 6.2 percent in the past year. That is the highest reported 12-month increase since November of 1990.
The national report states a fifty percent increase in gas prices, a six percent increase in the cost of food, and an eleven percent jump in the cost of energy services since November 2020.
“I am not surprised,” said Iowa State University economics professor Dr. Peter Orazem. “I think that there is a lot of upward pressure on prices during the last year. Incomes in Iowa and across the nation actually increased quite a bit, particularly from government transfer payments.”
The increase in wages and stimulus money has people being more active in the economy now than when the pandemic started. But there is not the availability of consumer goods like people are used to.
The increase in wages and the added boost of stimulus cited by Orazem may be offset by the lack of consumer goods, according to University of Northern Iowa economics professor David Surdam.
“It is reflecting some of the dynamics that are going on as we experience some supply chain problems,” said Surdam. “Fewer people working, assuming they are producing fewer goods and services, would put an onward pressure on the price.”
Orazem considers the situation a perfect storm for skyrocketing prices, but also for an increase in wages to keep up with the spike.
“You are beginning to see people factoring in inflation into what they are expecting for wage increases,” said Orazem. “Once you start seeing that, you start building in cycles of increasing prices,. That leads to increasing wages, which then leads to increasing prices once again.”