The News-Times

Surging inflation is forcing people and businesses to adapt


Across the United States, in homes and in businesses, the highest inflation in a generation is heightenin­g financial pressures and forcing people to adapt to a new reality.

The government’s report Friday that consumer prices jumped 6.8 percent over the past year — the highest such inflation rate in 39 years — showed that some of the largest cost spikes have been for such necessitie­s as food, energy, housing, autos and clothing. They are goods and services that millions of Americans regularly depend upon in their daily lives.

Stew Leonard Jr., who is president and CEO of a familyowne­d supermarke­t chain based in Connecticu­t and New York founded by his father, said that by sharing his higher costs with his suppliers, he’s managing to avoid raising prices drasticall­y on his customers.

“We are absorbing a lot of costs,” Leonard said. “We are trying to hold our prices low, and we will get through it and see where it goes. It’s a very erratic market right now.”

His chain is avoiding raising prices for such staples as milk, butter and eggs. But it’s charging more for more discretion­ary items like lobster and filet mignon. A pound of lobster has gone from $8 to $11.

Though some of Leonard’s customers are still buying those pricier items, lower-income shoppers are trading down from beef to chicken and from blueberrie­s to bananas.

Especially hard hit are lowerincom­e households with little or no cash cushions. For them, the accelerati­on of consumer prices has negated any higher wages they may have received. The price surge has also complicate­d the Federal Reserve’s plans to reduce its aid for the economy and coincided with flagging public support for President Joe Biden, who has been taking steps to try to ease inflation pressures.

Fueling the jump in inflation has been a mix of factors resulting from the swift rebound from the pandemic recession: A flood of government stimulus, ultra-low rates engineered by the Fed and supply shortages at factories. Manufactur­ers have been slowed by heaviertha­n-expected customer demand, COVID-related shutdowns and overwhelme­d ports and freight yards.

Employers, struggling with worker shortages, have also been raising pay, and many of them have boosted prices to offset their higher labor costs, thereby adding to inflation. The result has been price jumps for goods ranging from food and used vehicles to electronic­s, household furnishing­s and rental cars. The average price of a used vehicle rocketed nearly 28 percent from November 2020 to last month — to a record $29,011, according to data compiled by

The accelerati­on of prices, which began once the pandemic hit as Americans stuck at home flooded factories with orders for goods, has spread to services, from apartment rents and restaurant meals to medical services and entertainm­ent. Even some retailers that built their businesses around the allure of ultra-low prices have begun boosting them.

Over the past 12 months, the costs paid by a typical American family have surged by roughly $4,000, according to calculatio­ns by Jason Furman, a Harvard economist and former Obama White House aide.

Though Americans’ overall income has also increased since the pandemic, a new poll found that far more people are noticing higher inflation than higher wages. Two-thirds say their household costs have risen since the pandemic, compared with only about a quarter who say their incomes have increased, according to the poll by The Associated Press-NORC Center for Public Affairs Research.

Newspapers in English

Newspapers from United States