[Music] If you're heading to the grocery store Or buying some new appliances you may Notice A bigger hit to your wallet according to The us labor department Consumer prices last month rose at the Fastest rate in nearly 13 years Cbs money watch associate managing Editor irina ivanova joins us now to Break down what is going On thank you so much for joining us uh Irina so uh you know we're hearing uh Sort of all these calls that We're hitting a stretch of inflation and Inflation Generally is not a bad thing it's only When it sort of rises Faster than we can manage it and it Feels like that's what's happening now What are some of the factors Contributing to the rise in consumer Prices So some of what's happening is a Technical issue We're comparing prices this year to last Year and if you think about what was Happening Last may nobody was spending money we Were all holed up watching netflix and Baking Sourdough you know and a lot of prices Had fallen But the other thing that's happening is
The economy Is reopening all at once a lot of the Economy was just Shut down for last year not producing Goods And now that the u.s and parts of the Western world are Quickly reopening it's taking some time To get that production capacity fully up To speed And then the last thing is we have Issues with supply chains A lot of what we consume is made far Away And it's transported to us just in time For us to buy it If there's a delay in one of those steps It can throw off the entire process And if you think about it we've had a Lot of examples of such delays we had The Ship stuck in the suez canal we had Texas in a deep freeze in february we Had a Major east coast pipeline being Disrupted Container ships you know that ship goods To us ports not being able to unload Uh and trucks that deliver goods not Being able to take everything that needs To be delivered Yeah yeah i think we've all been Watching the price of lumber Um even people within the lumber
Industry have been sort of flabbergasted Um and i know that there are farmers out There who you know they used to supply Restaurants now they got to find another Place to sell their goods and so they're Selling somewhere else And add that add in the fact that you Know Many people still had their jobs so a Lot of people lost their jobs but also People were getting money from the Government to kind of keep them afloat So you have the kind of likes It's almost like a holy trinity of um Inflation And so but what particular consumer Goods are seeing the highest Inflation a lot of what's being hit is The really Big ticket items so things like cars Appliances and furniture in fact those Three categories are responsible for More than half of the increase in the Consumer price index So used cars are actually the fastest Growing item right now With the average used car costing Something like 25 000 And that's because we've had a shortage Of microchips which are an essential Component of cars Car makers slowed down their production Of new cars to accommodate the shortage And so a lot of car buyers are now
Turning to used cars driving up the Price Now those microchips are in a lot of Other things too they're in Washing machines microwaves Refrigerators they're in our cell phones And of course our Computers and so a lot of those items Are also uh Taking longer to produce and getting Pricier And then of course there's the lumber Which is 300 percent as expensive now as it was Last year That's making housing more expensive and That's making furniture for the house More expensive So you know what are the big biggest Concerns when we see this sort of Rise in prices who's hit the hardest Yeah when prices go up really fast like This Um it hurts the poor it hurts uh people On low incomes and hurts people on fixed Incomes you know so people on social Security retirees Um and a lot of people who who are Employed a lot of them are living on Such tight margins that You know if your grocery bill is 30 Higher Uh every week or if you're not able to Get a car that you need to get to your
Job You know that's a real struggle um the Long-term concern for economists is that The high prices could be so high for so Long That they drive down economic growth but We are A long way away from that So you talked a little bit about kind of The impact of the pandemic and how it Messed up supply chains and that kind of Threw the whole supply Component of this off now we are Starting to restart the economy And the demand is now putting pressure On the supply And so there's a mismatch there my Fingers across That once everything sort of gets back Online again Then we'll see the numbers go back down Is there any indication That the inflation may level off anytime Soon Most economists that i've talked to Expected to Level off very very soon um you know and We really haven't seen a bout of Sustained inflation in the us for for Going up four decades Um you know the last time we had a surge Of price increases for a few months like This Was in 2008 um and the the expectation
Is That you know as more of the economy Reopens and especially as more of those Parts of the economy reopened that We haven't been engaging in you know so The service economy uh going out to Restaurants going out to bars you know Travel and entertainment A lot of that was shut down and so People you know Spent on goods and on fixing up their Home and Economists are hoping that as the Economy sort of comes back to a full Reopening And that spending evens out that Inflation will die down Well i'm going to keep my fingers Crossed i saw a really funny meme about The price Of lumber and was something to the Effect of i'm thinking about selling my House for parts Don't sell your house for parts the Lumber prices may go back down Uh hopefully soon but at some point uh Rina thank you very much thank you for Having me
