The latest data from the Bureau of Labor Statistics shows that consumer prices are on the rise. John Rosen, an adjunct professor of economics at the University of New Haven, sat down with NBC Connecticut's Dan Corcoran to discuss why we're paying more for some everyday goods.
Dan: Why is this happening right now, and did economists expect this?
Rosen: "A lot of economists have been expecting this for some time. Why it is happening now is a combination of two things. One, short-term, is a rebound from the lockdown. Everybody’s out buying stuff now instead of staying home. The bigger picture is that our government, The Fed, has been flooding the world with dollars for a number of years and eventually the dollar outstrips the supply of goods and services."
Dan: Some people may glaze over when they hear the word "inflation" but they do pay attention when it's impacting their wallet. Why should consumers be keeping a close eye on this?
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Rosen: "If it locks in long-term - long-term inflation - it has an enormous number of very bad impacts on society. I'm old enough to have lived through the last version of that in the 70s and it was not pretty."
Dan: Big picture now. We thought we were coming out of this pandemic, but with a recent rise in Covid cases here in Connecticut, and more so in other stations, what are you watching on the economic front as we head into the fall?
Rosen: "I will personally be looking at demand for durable kinds of products; air conditioners, televisions, used cars. They don’t buy those kinds of things unless they're confident that they're going keep their job, that they're going to be out of the lockdown and they'll be able to enjoy them, and that they'll be able to pay them off and spend money on other things. So, if you see a decline in durable goods like that, consumers are starting to react to being locked down or just the price going back up."
