SALT LAKE CITY, Utah (ABC4 News) – Consumer inflation surged in October, new reports detail it as the fastest increase in 31 years.
“The vast majority of prices are going up in the economy and that’s when people really start to notice and really start to feel it,” said Phil Dean, a senior economist at the Kem C. Garner Institute.
The consumer price index shows overall, prices have climbed by 6.2% over the last year.
Dean said there are multiple contributing factors to the price hikes.
“It’s a combination of supply and demand factors, having trouble getting supplies in from overseas, and then here, people wanting to buy more things,” he said.
“Economic factors, a number of public policy factors that have kind of brought us to where we are today,” he continued to say. “It’s not just the out-of-the-blue in October we saw this increase.”
Across the country and here in Utah, Dean says energy (gas), food, and housing costs have gone up dramatically.
“We all need food, we all need shelter, we all need to figure out how to get around and these are some of the areas we’re seeing the highest pricing increases,” he said.
With some of the basic necessities going up the most in price, Dean said he’s worried about it.
“Especially for those at the lower end of the economic spectrum of not having the choice that maybe other people have,” he said. “I think they’re going to feel it much more acutely.”
“And housing in particular,” he continued to say. “This is one where renters, in particular, are feeling it acutely, those trying to get into the housing market are feeling it acutely; as a state, we need to figure out how to increase the supply of housing. Bottom line, that’s what’s driving the inflation in the housing market.”
With the cost of day-to-day living adding up, Dean said prices keep climbing, and it’s uncertain when it will drop.
If a family of four in Salt Lake City were to limit their budget to groceries, utilities, rent, gas, car payment, clothes, childcare, fitness membership, and eating out and going to a show a few times a month; Numbeo (a cost-of-living database) projects all of this to cost a family close to $6,500 a month.
With such high inflation rates impacting our economy, Dean said it can create a wage-price spiral.
“Employers have to pay employees higher wages,” Dean said. “Maybe for a little while they can take that out of profits, but then at some point, you’re going to have to pass that on to your customers in the form of higher prices.”
And when this happens, he said it creates a cycle of perpetual inflation.
Dean said this inflation “needs to get under control.”
For families struggling to make ends meet, Dean said there are government assistance programs available.