The cost of living surged 5% last month, according to the Department of Labor. That’s the highest inflation rate we’ve seen in more than a decade. Used cars, furniture, and even bacon have gotten more expensive.
The increase can be traced to global supply chain issues that have been present throughout the pandemic, says Bloomberg economics reporter Reade Pickert. Now due to the broader reopening of the economy, there’s more demand for goods and services.
“Folks have extra savings that they've had over the last year. They might have been using their stimulus checks towards goods and things like used cars. And so you really see these shifts in demand that have put pressure on these prices. And so the demand is outstripping the capacity that we have and the supply that we have,” Pickert explains.
Economists have told her that rising inflation is temporary once more goods are distributed through the economy.