DAYTON, Ohio (WDTN) — The U.S. saw another month of record-breaking prices. Consumer prices rose by seven percent for the month of December, marking the third consecutive month where prices rose by more than six percent.
Dr. Jeff Haymond, a Professor of Economics at Cedarville University, said the reasons for such high prices remain the same as the COVID-19 pandemic rages on.
“We don’t have as many workers to produce; you have disruption in the goods that can be produced for various reasons, and continued strong demand,” Dr. Haymond explained.
Since November 2020, the average price of orange juice went up $0.15, a dozen eggs went up $0.30, and the cost of bread went up $0.23 cents. Meat saw a major increase with the price of bacon going up $1.14 and ground beef going up $0.88.
Billy Pigg went for a quick trip into the grocery store Wednesday. He is one of millions of Americans worried about making ends meet during the pandemic.
“You gotta cut back on a lot of other stuff to keep going, especially when you have kids,” Pigg said.
Pigg said his grocery bill went up more than $200 a month.
“Cut back on going out and doing anything, or just driving around because the price of gas. And then everything, you gotta take away from that to be able to have your food and keep everything going,” Pigg said.
Dr. Haymond said in 2022 we could see more hidden costs marked by empty shelves as companies ration goods.
“The way that the market works is it rations goods via the price. I expect that rationing mechanism by price to really get in gear this coming year, so I expect prices to rise ongoing into the next year, certainly,” Dr. Haymond explained.
Dr. Haymond also said it remains up in the air when these prices will stop going up as new variants emerge and more people leave the workforce.
“The supply chain is part of it, but also the incentives to get people into the workforce that have to be there as well and I’m not sure when that is all going to play out and stabilize,” Dr. Haymond said.
There is also talk the Federal Reserve will begin tightening policy and increase interest rates with a goal to reduce inflation. Dr. Haymond said if the Fed tightens too much, it could lead to a recession.