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Inflation to blame for rising prices on consumer goods

(Scarlett Lisjak)
Published: Jul. 26, 2021 at 7:53 PM CDT
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RAPID CITY, S.D. (KOTA) -You may remember shopping at the grocery store and getting a whole week’s worth of food for just $25, now when you spend $100 dollars at the store, it’s hard to remember what you bought. Rising prices of goods and services could signal the health of our economy.

The Consumer Price Index reported that consumers are paying 5.4% more for goods and services than last year. Consulting Economist Don Frankenfeld says the CPI is one of the key measures of inflation, “that 5.4% rise in the Consumer Price Index is shocking, it’s scary, its worrisome. It might be like the fever that a person gets with a cold, and it dissipates rather quickly, one hopes that may be the case, but by no means certain that inflation with dissipate.”

Inflation is paying more and getting less, “higher prices, rising prices, for cars for food, or bank loans or anything else, it’s the prices going up,” Frankenfeld said.

He adds part of the reason for inflation is too much money in an economy with too few goods, “that creates a supply and demand imbalance, that imbalance is adjusted with higher prices.”

As far as predicting what will happen next, Frankenfeld says that reading the likelihood of what’s next, is like reading the probability of a weather forecast.

“I would say two years ago that the probability of higher inflation was nil, let’s say 10% or less, today I would say its 50% or higher. It’s a real concern, but we don’t know yet whether we are going to be facing some sort of cataclysm,” Frankenfeld said.

A cataclysm, or nothing at all, Frankenfeld says there is no way to predict what course inflation will take, making it a mystery left to unfold.

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