Inflation reached a 30-year high last month according to data released Wednesday, and experts say that these figures could hold for some time.
Dr. Thomas Payne is the Dean of Tennessee Tech’s College of Business. He said that these record numbers come from increase demand and issues with supply.
“We’ve had increased demand for products at a time where we haven’t had folks back in the workforce to provide them,” Payne said. “And in some cases, our supply chains have been disrupted, and that is a complicated story, but it certainly is causing inflation at least temporarily.”
Payne said that when it comes to supply chain issues, even just a hiccup can lead to bigger complications.
“It results in higher prices because the demand is still there, but the supply isn’t yet,” Payne said. “And so you can see where the Federal Reserve for one, and central banks around the world are really thinking ‘Okay is this going to clear up?’ And if so, when, and how much of it is supply chain?”
Payne said that he projects the current 6.2 percent consumer-price index, which measures the average price for things like housing, medical care, transportation, and other goods, to fall some in the first quarter of next year, but not enough. He said that the federal reserve typically wants that number at around 2 percent.
“Our best projections at this point is that we will see a decrease as reality or the new normal sets in as COVID becomes less of a pandemic and more of an endemic as we learn to live with it and opening back up,” Payne said.
Payne said that it’s important to pay attention to workforce numbers. He said that as stimulus and other government monies run out for consumers, people should start to get back into the workforce if they have the capability to do so.
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