Inflation in IL: How Much More Food and Gas Cost Residents?
ILLINOIS – The economy is doing well, maybe too well.
Nearly six million jobs have been created since President Joe Biden took office earlier this year, a record for a president’s first term, and the unemployment rate has fallen to 4.2% in l nationwide. And, as companies created 210,000 jobs in November – less than half of the number economists predicted – initial jobless claims fell to a 52-year low, and hourly wages rose at the fastest rate in two decades as companies competed for workers.
But prices are rising faster than wages, causing stickers to shock Illinois, which still has one of the nation’s highest unemployment rates at 6%, from a pandemic peak of 16.5%.
Amid the pandemic, supply chains have slowed down after companies postponed investments and delayed restocking of consumer goods to cut costs during a prolonged recession. That did not happen and businesses were caught on the wrong foot this year as they scrambled to meet unprecedented consumer demand.
High demand and limited supply have driven prices up in almost every sector of the economy over the past 12 months. And consumers full of savings – stimulus checks and nowhere to spend them – have widely accepted the price hikes, leading companies to increasingly pass the costs of reopening onto consumers, economists say.
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On Friday, the U.S. Bureau of Labor Statistics released its monthly consumer price index, a report showing how the price of a basket of goods has changed over time.
According to the report, prices in the Chicago area rose 0.2% over the past month, up 6% from a year ago. Food prices rose 0.8 percent from October and 6.9 percent from last year. While energy costs increased 1% month over month and 39.1% year over year.
Nationally, the consumer price index climbed 6.8% last year – biggest 12 month jump since 1982.
Here’s a sample of the sticker shock that people in Illinois face. Cereal prices rose 0.8% from last year. Gasoline jumped 65.1%. Furnishings cost 10% compared to a year ago. And used cars are up 31.4%.
But there is also some good news hidden in the report. While most goods are up significantly from a year ago, many are down from last month, meaning inflation could slow. Milk prices, for example, have fallen 1.8 percent in Illinois since October. Clothing prices fell 3.3% from last month.
And – beyond the period covered by the CPI report – average gasoline prices fell to a seven-week low of $ 3.35 per gallon, according to AAA. Energy Information Administration expects them to continue to decline in the coming months, which could deprive the CPI – which economists sometimes call the consumer pain index – of some of its bite.
Yet despite these glimmers of hope, Federal Reserve Chairman Jerome Powell backed down by promising that inflation would “transient. ”
Fed officials have been scrambling to address inflation concerns with plans to reduce the bond buying program which supported the financial system during the pandemic, sometimes disrupting the stock market.
But while economists now say they don’t know exactly how long the higher prices will last, most believe they will eventually revert to something near normal.
How much have your bills increased in the past year? Let us know in the comments.