What North Texans are saying about the impact of inflation
NORTH TEXAS (CBSDFW.COM) – The word 'inflation' can cause people to cringe.
Prices of everyday items have hit a 40-year high.
It's impacting just about everyone, especially seniors and the working class.
The Consumer Price Index for the Dallas-Fort Worth area shows rent increased more than 10% in September from the same month last year.
Gas prices rose more than 11% during that same time.
Electricity shot up by nearly 31%.
Food prices climbed by more than 14%.
A further breakdown shows cereals and bakery items jumped by more than 12%.
Meats, poultry, fish and eggs went up by 12.5%, and dairy 19%.
You've no doubt felt those price hikes in your own wallet.
Some of you have had to dip into your savings and many of you have had to find creative ways to cut costs.
Ashley Curtin of Fort Worth told CBS 11, "Things like getting a facial every month, getting my hair done all the time, those things I've taken and put to the side because it's not a primary reason because groceries have gone up."
Kathy Hobbs, another Fort Worth resident, spoke to CBS 11 after returning from a store. "We're here picking up glasses and contacts and I'm due also but I'm going to make sure our kids have it first, so as where last year, we might have all done it together. Now, we're spacing that out."
Graylin Vinning, also of Fort Worth, said salaries aren't keeping up with inflation. "I don't understand why all the prices, and everything are going up. Jobs are not paying what they used to, and I don't understand how we're going to survive this."
He's not alone.
The obvious question now is when will prices come down?
CBS 11 asked Mike Davis, economics professor at the Cox School of Business at SMU in Dallas. "I can comfortably say that we're not going to see much relief through the end of the year," Davis said. "I'd love to be wrong, but I'm afraid I'm not going to be wrong whether we begin to see relief in the first or second quarter of 2023."
Davis said prices could drop if the U.S. falls into another word people dread: recession.
But that doesn't seem likely as the Gross Domestic Product, or GDP, grew by 2.6% in the third quarter of this year.
So, what's driving these high prices?
Davis said it comes down to a greater demand for goods, supply chain constraints, smaller inventories, and a tight labor market.
Some companies have given employees raises but that's increased prices as a result.
Davis said there's another factor: "I think most of us now agree that a big part of the problem we're seeing today is a consequence of the uh of the spending that happened in the spring of 2021. Remember, there was a big so-called stimulus package. A lot of people got pretty generous checks from the government. People are spending that money, and when they spend money, they increase demand and raise prices."
To lower inflation, the Federal Reserve has raised interest rates.
That makes it more expensive for people and businesses to borrow money.
The economy is the number one issue for many voters.
Now, the balance of power in Washington is one the line and in your hands.
