Whether on TV or in a grocery store, signs of record-high inflation are unavoidable. Food prices are up 10%, new vehicles 12.5% and gasoline almost 50% compared to last year, according to the U.S. Bureau of Labor Statistics.
“What’s Your Problem” podcast host and analyst Jacob Goldstein told CBS News that the two biggest categories seeing price jumps are food and fuel.
“It’s extraordinary,” he said. “It’s gone up so much, so fast. And you know one of the things about gas is you just see it, like it’s literally in your face, there’s a great big sign, then you see the numbers go up, so it’s extra painful.”
Goldstein believes thatis largely to blame for the gas price increase.
“Russia invaded Ukraine, Russia is a huge supplier of oil, people aren’t buying as much oil from Russia, so that’s a big part of it,” said Goldstein.
Add to that another supply problem: refining capacity lost during the pandemic has not fully recovered.
It’s not just fuel — many industries’ supply chains have struggled to rebound after the pandemic. At Morton Williams Super Market in New York, manager Douglas McKinley said he’s never had so much trouble placing orders.
“Almost every vendor has an issue,” he said.
The store hasn’t had baby formula for months and has seen egg prices nearly double in just a year.
Goldstein said that while food and gas are in demand, workers are as well — right now for every American looking for a job, there are two job openings.
“So unemployment is at this historic low, now, right. And sort of weirdly that’s a big part of the reason inflation is so high,” he said.
Goldstein said lowcan be both good for individuals and problematic for the economy because it means employers have to outbid each other for the few available workers.
Another problem, Goldstein believes, are the stimulus checks that the government issued in 2020 and 2021. He said they caused the economy to become “overheated.”
At the time, one of the few people who warned that stimulus checks brought inflation risks was former Treasury Secretary Larry Summers.
Summers, who has been speaking with President Biden, said that every time unemployment has been this low and inflation this high, the result has been a. He believes the unemployment rate will need to remain at 6% for five years and that interest rates would need to be raised to tame inflation.
“It’s not too late to bring the situation under control, but we’re gonna have to accept some real pain and dislocation in order to do it,” Summers said. “We’re raising, but I think we likely have a ways to go. I think we’re gonna have to push interest rates quite far up.”
Goldstein said he expects inflation rates to cool down soon, but that the country hasn’t seen the end of high prices just yet.
“I think inflation’s more likely to go down over the next several months than it is to go up, but I’m not sure it’s down forever,” Goldstein said. “I think it’s a mistake to assume that we’ve seen the worst of inflation.”