WISCONSIN (NBC 26) — We're more than a year into the pandemic and many things in our lives have changed: from working from home, to how we socialize, and now to how we’re spending our dollars.
Just this April, inflation across the U.S. accelerated at its fastest rate in more than 12 years.
Noah Williams, University of Wisconsin-Madison Economics Professor and Director for the Center for Research on the Wisconsin Economy explains more on the consumer price index (CPI) report released Wednesday:
Here’s why:
"Some of that was due to the fact that last year at this time we actually had a drop in prices. So the year over year change is what we call 'base effect', meaning we are measuring relative to a low level,” Williams explains. “But even still, even if we look at what was part that increased over the last month, that in itself was almost one percentage point. So that is equivalent to like ten percent on an annual basis.”
Even though the U.S. had a slow-down in economic activity during the pandemic, Williams said income levels actually remained high.
A lot of that he said is due to federal support with rounds of stimulus checks and an increase in unemployment benefits.
He further explains how this has compared to the stimulus money given in past years:
Williams explains more on inflation:
"So this combination of tighter supply and steadier increase demand gives rise for potential roll for prices to go up,” Williams said.
Supply chains for many area manufacturers are hurting. According to the latest survey from the Northeast Wisconsin (NEW) Manufacturing Alliance, 25 percent of manufacturers reported they have been forced to find new suppliers due to Covid-19.
The survey was administered in October and November 2020 by the University of Wisconsin-Oshkosh’s Center for Customized Research Services. 128 companies completed either a telephone or online survey.
Click here to see that full report.
And with grocery prices spiking, Feeding America Eastern Wisconsin says inflation has the risk to hurt some of our most vulnerable neighbors.
"Food items they've had a hard time affording will become even farther out of their reach. So if they can't afford to shop in the grocery store now that will start to cause more traffic in our pantries and more pressure on them,” said Lisa Endl, Feeding America Eastern Wisconsin Communications Director.
So do Wisconsinites need to worry about inflation?
Williams says it's too soon to tell, as we need to see what the next months bring:
A new University of Wisconsin details the performance of the unemployment insurance system during COVID-19 in the United States and in Wisconsin.
The report, done by Williams, detailed areas where the state was behind most other states as the wave of unemployment claims swamped the state’s Department of Workforce Development last year.
To read the full report click here.
