Inflation rates rise; What does this mean for the Tennessee Valley?
FLORENCE, Ala. (WAFF) - The economy is reopening, but some prices are increasing.
Does that mean inflation is going to be a problem in 2021?
Consumer prices have been pushed up by rapidly increasing demand as the economy recovers.
In the 12 months through April, consumer prices jumped 4.2 percent, the most in 13-years. With the rise comes the big question: Is it a blip or a return to another recession?
Athens State Professor Thomas Pieplow has been an economics professor for over 20 years. He said right now, it’s too early to tell
“That 4.2 percent increase is isolated. It’s very big increases in some isolated areas,” said Pieplow.
Much of the increase in April was driven by used car and truck prices, which jumped 10 percent during the month, by far the biggest increase of any category that makes up at least 1 percent of the index.
“My belief is if we had seen a more broad increase in all of the areas maybe that would be cause for concern,” said Pieplow.
UNA Professor Jason Imbrogno said that if inflation rates continue to increase consumers will see it in their everyday lives.
“It’s not so much that we can predict which items are going to go up more or quicker. It’s more a question of what will consumers notice and they notice these normal, weekly consumer goods: gas, food stuff, restaurants, etc., going up,” said Imbrogno.
Professor Pieplow said these rates may be temporary as the economy continues to grow and normalize as the pandemic-induced recession starts to end.
“This is new for all of us. It’s something we’ve never done before so in turn, a lot of the economic predictions are based on the best information but they’ll acknowledge, we’re still being driven to a degree by the virus,” said Pieplow.
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