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Soaring inflation hits 40-year mark, and for many it feels higher

By and David Komer online producer
Published  July 13, 2022 8:34pm EDT
Economy
FOX 2 Detroit

Soaring inflation hit 40-year high and economics professor explains what to expect

Another 40-year high for inflation and to many it feels even high than the official Labor Department stats.

FOX 2 - Another 40-year high for inflation and to many it feels even high than the official Labor Department stats.

"I believe It’s more like 15 to 20 percent," said Metro Detroiter Marleta Robinson. "And it's not just food, gas, it's cost of living, your rent."

The Consumer Price Index is a broad measure of the costs urban consumers pay for everyday goods, has soared to 9.1 percent – year over year. Nearly half of the increase can be blamed on higher energy costs.

All of this adds up to a lack of consumer confidence in just about anything.

"A lot of people are just trying to figure it out at this point - what do you do from now," said one man.

Federal Reserve Chair Jerome Powell met with lawmakers Tuesday ahead of the bombshell figures we saw Wednesday. Legislators confirm Powell is still very concerned about inflation.

Oakland University Economist Dr. Michael Griner points out that this figure, like many economic measures, is a lagging indicator.

"There’s a lot to be said for the fact that this is backward-looking," he said. "And the things that were the biggest price pressures, have actually been coming down a little bit."

FOX 2: "We had a Consumer Price Index print of 9.1 percent but the core price increase year over year was about 5.9 percent. How high is inflation in reality it feels greater than 5.9 or  9.1 percent."

"Yeah it does," said Dr. Griner. "And that's the reality when you look at the numbers because when you look at the CPI, the numbers that jumped by a lot are basically energy prices, food prices, and housing."

Then there’s the effect on jobs. The U.S. added 372,000 jobs in June but estimates are there are still more than 11 million job openings.  

"You’re talking about people for example in the hotel industry, the restaurant industry who might not be paid more," Griner said. "Whereas people in more professional roles, might have kept their jobs throughout the recession or might have come back earlier on, once the Covid crisis was over.

"In some of these lower paid professions, people are just starting to come back."