PHOENIX - Fears of inflation are causing concern for many Americans, and now, we are getting a better idea of how fast prices are rising.
"Grocery prices going up, gasoline going up," said Otis Alexander.
Prices across the country have gone way up these last couple of months. Nationally, prices have risen 4.2% over the last year, and in Phoenix, prices have gone up even more.
"My regular grocery bill, what I’ll usually buy every two weeks is maybe $20 higher. Dog food is a couple of dollars more. That adds up," said Valerie Leach.
According to the U.S Bureau of Labor Statistics, prices in the Phoenix area have risen 2.4% just in the last two months. Prices are now 4.9% higher than they were at this time in 2020.
Dennis Hoffman, a Professor of Economics at the Arizona State University, explains that inflation happens when there is too much money chasing too few goods. He’s not surprised to see this level of inflation after more than a year of the pandemic.
"The economy was shut down a year ago today. Of course you’re gonna get a dramatic price increase," said Hoffman. "I think the real proof of the pudding is gonna be is how are prices performing mid-summer, into the fall, into next year."
Hoffman is advising people not to panic-buy because whether that be hoarding toilet paper, like in 2020, or trying to consistently top off the gas tank, he says it will ultimately make things worse.
"It just exacerbates the problem," said Hoffman.
Hoffman adds that he does not think this degree of inflation will devalue the U.S. Dollar, for now. However, there are still some who will be affected by this.
"People with low Social Security payments, pensions that are not tied to inflation clauses, and people that have to somehow buy products that are hit most by inflation," said Hoffman.
Hoffman does believe that in the coming months, things will begin to level out.
"It's more likely than not that inflation rates will moderate, because the same types of productivity-enhancing supply chains will be restored. Plants will have opened up," said Hoffman.
Hoffman says one way to help bring down the inflation rate is for businesses to pay their employees more, as a way to incentivize people who may still be at home to reenter the workforce.
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