Consumers paying more for a lot of items due in part to supply chain shortages
Experts say it could be up to six months before the economy settles in to its new normal
TOLEDO, Ohio (WTVG) - Do you feel like you’re paying more for a lot of things these days? Well, you are. The Producer Price Index, which tracks how much money domestic producers get for their products, jumped 0.8% In May. Put together with the previous eleven months, it amounts to a 6.6% increase. That is the largest twelve-month jump since 2010.
Economists say you’re paying more for just about everything because of rising demand from the economy re-opening and shortages in supply chains.
One of the places a lot of you are no doubt noticing those increases is on your food bill. Experts say many are seeing price hikes of 8-10%.
“Little disruptions in one aspect, have an impact on final consumer price,” says Dr. Paul Hong, a Distinguished Professor of Global Supply Chain Management at The University of Toledo. “After a year of lockdown, we cannot all of a sudden start everything running the way it was. The entire system needs a time of adjustment.”
The supply chain shortage has a lot of tentacles to it. Because of the pandemic, there was a decrease in production at many facilities.
“Within the next couple months, there will be a re-adjustment process,” says Dr. Hong. “So when production increases and demand patterns stabilize we will get back to our new normal.”
There’s a labor shortage in just about every business big and small right now. That includes the trucking industry. The driver shortage makes it more difficult and more expensive to move things from one place to another.
“The fruit and vegetable production in places like California, Washington, and Florida is not at normal levels,” says Dr. Hong, noting that there are also fewer migrant and seasonal workers coming to America right now which impacts supply and cost.
And getting back to what Dr. Hong calls our new normal will take time.
“After the summer months, production levels will be back to normal in many industries,” he says. “The U.S. government is working hard to deal with things like the semi-conductor chip shortage, and other issues. In the next 3-6 months we should be in a better position.”
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