WALTHAM, MASSACHUSETTS (CBS) – “Meat is above and beyond all is well?” Fadia Chamoun of Lexington, Mass., Lamented as she filled her trunk with groceries. “It’s skyrocketed. Everything’s skyrocketed and it’s extremely sad.
If it seems like everything is more expensive lately, that’s because it is.
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“The government [just] published that prices over the past 12 months have increased by 5.4% and that this marks the fifth consecutive month of price increases of more than 5%, ”explained Jay Zagorsky, professor at the Questrom School of Business from Boston University. “That means that about every 14 or 15 years, all prices double. Everything is twice as expensive if this continues.
Price increases have hit some industries particularly hard over the past year. Used car prices have increased by around 24%. The price of meat has increased 12% in 12 months. Heating oil is up about 43%. Another area of concern to many commuters is gasoline prices, which have risen by more than $ 1 a gallon.
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“Now that a lot of people are going shopping again, a lot of people are going to travel again, we want to spend this money,” Zagorsky explained. “But the objects just aren’t there.”
Experts attribute the price increases to the residual effects of the pandemic: labor and supply shortages. Essentially, the manufacturing sector is trying to catch up with the skyrocketing demand, which drives up prices.
So what can be done to lower the cost of living while waiting for supply to catch up? “The Federal Reserve may have to start raising interest rates,” Zagorsky explained. “Raising interest rates will reduce inflationary pressures, but it also means the party is over… there just won’t be many people bidding on houses once interest rates rise. “
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“There is a kind of balance here,” he explained. “The balance is that the government has some control over inflation, but there is no easy choice. “