Prices Hit 40-Year High: Inflation In Lake Norman Concerns Expert

DAVIDSON, NC — Families are revising their budgets and tightening their belts as the cost of essentials such as gasoline, groceries and clothes rises due to inflation.

Lisa Black, a retiree in Huntersville, said she now dreads shopping trips.

"I went to the grocery store yesterday," Black said. "I had one small bag of paper items and one plastic bag of cold items, about 12 items. It was $90," she said. "I am retired; this is going to impact everything in my life."

Black isn't the only person taking a harder look at her budget and learning more about inflation, which is the general increase in the cost of goods and services.

"My daughter didn't understand the word inflation, so I told her last year to fill up my car with gas, it cost $27, and now it costs $48. Then I showed her in a grocery cart what $21 would buy," said Debbie Ericson of Cornelius. The answer, of course — not much."

There are mitigating factors when one parses out individual goods and services to examine the root causes for increases or inflation. The cost of gas nationwide has fallen over the past five weeks, AAA explained. Those watching the market will keep a close eye on crude oil inventories and the impact that the omicron variant of the coronavirus has on demand for gasoline. Gas prices were lower last year because of the decrease in demand as people traveled less during the pandemic.

For grocery costs, supply chain issues are crippling the normal path between manufacturing, shipping and distribution. Grocery prices are expected to continue to rise in 2022, according to the Bureau of Labor and Statistics, and they're already more than 5.4 percent higher than last year.

Individual items such as baby food have seen prices inch above 8 percent, and eggs have gone up more than 11 percent over last year.

It's a trend that Davidson College economics professor Vikram Kumar said should alarm people. Kumar is internationally respected for his expertise on world finance and economic thought.

"Inflation is an unwanted guest who shows up and doesn’t want to leave," Kumar said. “We have really not had a significant case of inflation since the early 1990s."

It's a concept that not many under age 35 are familiar with, just like Ericson's daughter.

"We have had more than a generation of Americans who have grown up with little inflation," he said.

Inflation is insidious, Kumar said, creeping into every aspect of consumer affairs, and has multiple causes.

"COVID-19 created some shocks on the supply side," Kumar said. "You’ve probably read about the semiconductor and microchip shortage that is causing a number of shortages where supply cannot meet demand. That's an example of how the pandemic interrupted the supply side of the economic system."

When asked if he's concerned about the current trajectory of inflation, Kumar said yes.

"Once inflation takes root, it's very costly to uproot it," Kumar said. "Because to undo it, you have to take the economy through a recessionary phase. That's the orthodoxy. So I think we should not be sanguine about the current state of affairs. I'm not hearing the degree of concern that I’d like to."

President Joe Biden has said his administration and the Federal Reserve believe the current issues with inflation is "transitory" in nature, or like a phase after the brunt of the pandemic is hopefully over.

Kumar is critical of that idea because he feels there might be more of a long-term economic shift happening that the presidential administration and the Fed are not sensitive to.

In other words, he thinks it may not be just a phase at all.

"Public figures have been trying to shape expectations by saying that the inflation we are seeing is transitory,” Kumar said. “But at some point, when does transitory become non-transitory?"

Families locally hope it is just transitory.

"When people facing medical crisis or disabilities have to spend so much more for gas and food and utilities, then they have to start eliminating the very things they depend on for good health and for health issue maintenance," said Black. They'll then face tough choices. "Food or medication?"