Consumers costs keep climbing at a rapid pace, particularly in food, energy, and housing.
According to the New York Times, costs in October were 6.2 percent higher than the prior year, the greatest inflation rate since 1990. Expert’s attribute most of this increase to supply chain disruptions caused by the outbreak.
“So the rate between last year and this year is approximately 5%, which is about twice the rate that The Federal Reserve targets, which is roughly 2%,” said Dr. Samia Islam, an economics professor at Boise State.
According to Islam, a jump in fresh demand following economic recovery is also adding to this problem.
Rapid inflation can put further strain on a group that is already struggling financially.
Gabriel Miklja, a finance major with a supply chain management minor at Boise State, highlighted that severe inflation has been harming students for years.
“If you look at reading materials, they’ve risen 87 percent or 8.7% a year over the last ten years, tuition and fees have increased 63 percent or 6.3 percent a year, and accommodation, which is big here in Boise, has increased 51 percent or 5.1 percent a year,” Miklja said, citing Bureau of Labor Statistics estimates.
Many students already struggle financially, with around 30% of undergraduates relying on federal loans, some of which are devastating in nature.
Inflationary impacts in Boise are not limited to students, particularly when it comes to housing expenses, which have increased by 39 percent since March 2020.
Individuals and businesses have found it challenging to find locations in Boise and the neighboring areas due to inflation and a short inventory of structures.
According to Bethany Ineck, director of economic development for the Boise Valley Economic Partnership, a private nonprofit entity with a board of directors comprised of both industry and city representatives, rising lumber prices make it more expensive to construct new structures, further compounding the problem.
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According to Islam, experts are unsure how this inflation will cycle out in the economy due to unique conditions generated by the epidemic.
In the past, rising manufacturing costs caused by inflation have resulted in lower pay or layoffs.
Today’s businesses, on the other hand, are plagued with the opposite dilemma. Months after the workforce was due to return from lockdown, labor shortages continue to plague the country.
The inflation does not look to be as short-lived as projected, and it appears that the inflation cycle will simply have to play out as these unknown forces continue to alter the status quo.
Meanwhile, smaller companies may face the brunt of the expense owing to “menu costs,” a phrase derived from the assumption that large restaurants spend a tiny percentage of their income publishing menus, but small restaurants may spend a larger percentage of their revenue.
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