CAPITAL REGION, N.Y. (NEWS10) — A continued impact on your wallet, as new statistics released Wednesday showed consumer costs in the United States rose 6.2% in October versus the previous 12 months, the highest inflation rate Americans have faced since 1990.
“The economy is still catching up to this pent up demand,” Marketa Wolfe, an associate professor of economics at Skidmore College explained.
Nationwide, the Consumer Price Index showed a 6.2% increase in the cost of all items over the past year, driven by spikes in energy, shelter, food and vehicle costs. On top of paying more at the pump, the cost of utility gas has also jumped over 28% in the past 12 months.
“There’s a big demand for natural gas across the globe, that drives the prices up. We also had a lot of weather events, especially if you look at last winter and spring, especially in the Gulf Region. And that’s where we get a lot of that natural gas, comes from the Gulf,” National Grid spokesman Patrick Stella explained.
With the winter approaching, Stella says customers should expect higher bills from now until March, “Compared to last year, customers will pay about $155 more over that five month period, so about $31 a month.”
He explains these rates will all depend on how cold or mild the winter is, which could either further drive up costs or bring them down. There are also options available to help customers pay for their energy bills, including through the Home Energy Assistance Program.
But the rise in prices isn’t isolated to energy, with costs across the board on the rise. Data from the U.S. Bureau of Labor Statistics shows that the cost of all items was up nearly one percent in October compared to September.
“It’s not unusual that it bumps up in the recovery, and it’s not unusual for a bunch of prices to go up at the same time. But, I think like how long it’s lasting and how elevated it is, now that’s beginning to be a concern,” Wolfe said.
Wolfe says there are a number of reasons the economy is seeing inflation, including the rapid recovery from a COVID-shuttered economy and the ripple effects of federal stimulus funding.
“Kind of like a perfect storm of factors. The supply chain issues that are really related to the materials, but also the labor shortages, and those themselves may be coming from different factors,” she said.
She says it’s difficult to predict how long costs will remain this high, due to the number of factors currently contributing to inflation, including how long the worker shortage and supply chain concerns will continue.
Wolfe adds the rise in costs could have an immediate impact on lower income families, especially if the rising costs are not offset by rising wages.
Despite the highest inflation rate since 1990, the associate professor says it’s important to put this trend in historical context, especially when the inflation rate in the 1970s and 1980s was more concerning.