One grocer is anticipating that the cost of produce and food will increase roughly 10-14% by October, negatively impacting families across the country. This inflation is part of a growing trend that is making it more and more difficult for Americans to afford the things that they did last year and putting an untenable strain on families.
Inflation can be a good thing and can indicate that an economy is growing, but only when paychecks rise in tandem. It should also be a slow process, not a fast one, which is called hyperinflation and could signal a country that is heading towards economic collapse.
The United States is nowhere near hyperinflation, but rising costs of food, cars, gas, and other necessities are beginning to hit families hard—and it’s not over yet.
Businessman John Catsimatidis, who owns a Manhattan-based grocery store chain, is anticipating that the cost of food could increase by 10-14% in the next couple of months.
“Food prices are getting higher, and we expect even more increases by October,” he said. “We’re seeing anywhere from 10% to 14% by October 1. It’s a real number.”
When pressed about how this will impact consumers and businesses, Catsimatidis said, “You have to pass it on, otherwise you’re not doing your duty to guard… your employees and your company.”
Restaurants are also passing these cost increases onto consumers, with prices 4.0% higher in May 2021 when compared with May 2020. When it comes to purchasing produce and food in stores, costs are 0.7% higher when compared to last year.
Currently, inflation overall is already high and rising. According to the Department of Labor, inflation’s year-over-year rate has reached 5.4%. As a comparison, in 2020 inflation rose by only 1.4%. The last time it hit 3% was in 2011.
This means that product prices are increasing at a fast rate, but the average paycheck generally hasn’t been able to keep up. Minimum wage is probably one of the lone exceptions—however, companies that increase wages to $15 an hour for something like scooping ice cream are beginning to pass these costs off to consumers, which is also increasing the costs of visiting a place like Baskin Robbins (as I discovered last year).
In addition, there’s the surging rate of shoplifting. While stores may be covered for the thefts, insurance companies may charge more to protect businesses from the loss of inventory. The situation will only continue to deteriorate as certain states, like California, have made laws that basically decriminalize the practice, allowing thieves to become ever more brazen.
For example, two men were caught on a cellphone camera just walking out of a TJ Maxx in Granada Hills with impunity. Generally, retail companies discourage their staff members from confronting shoplifters. Even if the men are caught, they’ll simply get a slap on the wrist. I was also recently at a TJ Maxx where I’m pretty sure a man walked out with an entire basket full of purses without paying. It was rather shocking, and it didn’t even appear like the staff members had much of a reaction.
In the end, all of this economic upheaval and uncertainty is impacting families and their ability to afford basic expenses, like gas, food, clothing and rent, or pump additional money into the economy through vacations.
A report in April showed that the inflation increase is similar to the one that occurred in 2008, when the recession first hit. Fuel prices are now over $3.00 a gallon for the first time since 2014, making those summer road trips less economically feasible for many.
Used car and truck prices have risen by 21%, which is considered a key economic factor. In addition, new cars are more difficult to come by, as a lack of supplies, especially computer chips, have negatively impacted availability. An NBS News report indicates that manufactures will build 1.2 million fewer cars this year.
This is hitting American wallets hard, and there is no relief in sight, though politicians insist that the situation is only temporary and another stating that it’s just “sector specific” and due to “supply-chain issues.”
While that assessment bears some truth, the country’s current economic policies are not helping the matter by any means.
The United States saw double digit inflation increases in the 1970s, in addition to fuel shortages. Across the entire decade, inflation averaged 6.8%, with highs of about 12% in 1975 and a peak at nearly 15% in 1980. The media is catching onto this as well, with NPR reporting in May, “The 1970s are starting to trend—for all the wrong reasons.”
So, what can families do to weather this storm?
Dave Ramsey has a couple of suggestions.
- Stay calm: You can prepare without panicking.
- Budget: Armed with a budget, you’ll be able to make sure your money is going toward the right things, while being able to find places where you can cut back on your spending.
- Save: Look for ways to save where you can, like on your monthly grocery bill or gas money. “Just make sure you’ve budgeted for that before you head into the grocery store. That way, you already know exactly what you’ll spend and won’t get swept up into the panic buying (toilet paper circa 2020, anyone?).”
- Invest: “Like it or not, inflation is a thing. If you retire in 20 or 30 years, it’s pretty much a guarantee that the cost of a loaf of bread, tank of gas, and cup of coffee will have gone up by then. The best way to protect yourself against inflation (that is bound to happen), is to invest your money—the sooner the better. But remember, if you still have debt (other than your mortgage) and don’t have an emergency fund sitting pretty, you need to take care of both of those things first. The sooner you take care of all of that, the sooner you can invest and get to work on your long-term goals.”
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