Inflation Begins To Take Bite Out Of Consumer Wallets, As Prices Rise Almost Everywhere

WASHINGTON (KDKA) — Hold onto your wallets.

The prices of the things you buy are on the rise.

We are heading into an inflationary period.

“All signs indicate that we are,” says Dr. Patrick Litzinger, a Robert Morris University economist.

The U.S. Bureau of Labor Statistics just reported the price index for the year ending January jumped 2.5 percent, the largest increase in nearly five years.

“Which is why we are a little bit worried about the numbers that just came out,” Dr. Risa Kumazawa, a Duquesne University economist, told KDKA money editor Jon Delano on Thursday.

After years of zero to one percent inflation, this increase seems unavoidable.

“Everybody can expect to see prices generally rising,” says Litzinger.

While gasoline prices spiked almost 8 percent in January, lots of other sectors of the economy are going up as well.

The cost of housing is up almost 4 percent for the last twelve months, while food at restaurants is up over two percent, medical care commodities are up nearly 5 percent and clothing up one percent.

Part of the future uncertainty is Trump administration policies on trade, says Kumazawa.

“We’ve been hearing a lot about tariffs being imposed, and because we’re in such a globally connected economy, this would impact domestic prices.”

Tariffs on goods made overseas and sold here will increase prices and inflation, and so will the President’s plan to cut taxes, says Litzinger.

“Putting more spending power across that broad range of the economy will fuel inflation.”

Unless your wages go up, too, inflation hurts the bottom line.

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(Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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