WALTHAM (CBS) – “Meat above and beyond okay?” Fadia Chamoun from Lexington cried as she packed her suitcase with food. “He rose to the sky. Everything went up to the heavens, and that is extremely sad.”
If everything seems to be more expensive lately, it’s because it is.
“Government [just] Boston University Questrom School of Business professor Jay Zagorsky explained that prices have increased 5.4% in the last 12 months, marking the fifth month in a row with a price increase of more than 5%. “This means that roughly every 14 or 15 years, all prices double. If it goes on like this, everything will be twice as expensive.”
Price increases hit some sectors hard, especially last year. Used car prices rose nearly 24 percent. The cost of meat increased 12 percent in 12 months. The home heating oil estimate rose 43 percent. Another area on many travelers’ minds: gasoline prices, which have increased by more than $1 per gallon.
“Now a lot of people go shopping again, a lot of people travel again, we want to spend that money,” said Zagorsky. “But the items are not there.”
Experts attribute the price increases to the residual effects of the pandemic: labor and supply shortages. In essence, manufacturing is trying to catch up with rapidly increasing demand, which is causing prices to skyrocket.
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 said. “Raising interest rates will reduce inflationary pressures, but it also means the party is over… When interest rates rise, there won’t be many people bidding on the house.”
“There’s a kind of balance here,” he explained. “The balance is that the government has some control over inflation, but there are no easy choices.”