Expert predicts reduction in price of some consumer goods come Fourth of July
With interest rates and inflation climbing, many people want to know when these high prices will start to trend downward, and at least one investment professional has said that some financial freedom may be right around the corner.
"It's just constant. It's in their face. They're getting hit all the time," said Chris Markowski of Markowski Investments.
According to the Bureau of Labor Statistics, the consumer price index of all goods increased 1% in May over April, and 8.6% from more than a year ago.
Plus, the Federal Reserve raised interest rates in the biggest hike in 28 years, though most people's wages and salaries have remained the same.
"From kids stuffed toys that used to be $10.99 are now $13. So, anywhere from $2 to $3 extra,' shopper Debbie Gonzales told CBSLA.
Markowski said many people have a bleak sense of the current economy.
"People today actually feel worse about the economy than they did during the great recession, when unemployment was at double digits and people were getting thrown out of their homes," he said.
Renters can't seem to become homebuyers.
"When we bought our home, it was reasonable. We could afford it. I just don't see how the average couple starting this day and time can make it," said Gonzales.
"Warren Buffet said only when the down [payment] is 10% of your liquid assets. So, let's say that the down [payment] was $400,000, when you have $4 million, that's when you should consider a home," said shopper Rohit Dubey, laughing. "Do I have? No. Maybe that's why I don't have a home."
Mortgage rates are now near 6%, double what it was a year ago. Traditionally, when this happens, home prices go down, but not in this market.
"We have an inventory problem right now as well," said Markowski. "This is why they can't come down as quickly, and the millions of units that need to be built and because of some of the supply chain issues, it's slowed that down."
However, Markowski doesn't believe that all hope is lost. He predicts that around July 4, there will be deflation and consumers will finally see major markdowns.
"I'm just telling you right now, if you have something to purchase, like new lounge chairs for our houses that you have to go to Target to buy, just wait," he said.
Retailers will finally have their backordered items in stock and they'll need to get rid of it quickly to make room for new inventory.
"The issues that we had with the supply chain and the ports being backed up, well, a lot of this stuff that they ordered came in and it was for last year or during the pandemic and people's buying habits have now changed," Markowski said. "Hopefully, we will be somewhat stabilized within a good period.