Inflation impacting Americans: Possible causes explained

Bansri Patel, Staff Writer

Have you ever bought a carton of eggs, looked at the receipt and thought, ‘These didn’t cost this much last month”? The rising costs that many families are noticing are due to inflation.

Inflation happens when the government prints more money, which causes the U.S. dollar to lose value and prices for goods and services to rise. 

Inflation can also happen when the cost of providing goods and services increases for businesses and they pass those costs onto consumers so that profits remain similar. This type of inflation is called cost push inflation. Cost push inflation is when prices of goods and services increase because the prices of production grows. This form of inflation brings prices higher in a bad way because now the company selling the product is bringing in the same amount of money but we as the consumers are losing money due to the prices getting higher. 

According to Investopedia, the U.S. inflation rate is 8.50 percent. That indicates an increase of  .60% each month in 2022. The inflation rate on food inflation rate was even higher–going up .90% to 8.80% from 7.90%. This is the highest inflation rate since 1981 and experts predict it will get worse.

Inflation can be caused by a surge in demand for products. According to Investopedia, “Inflation can occur when prices rise due to increases in production costs, such as raw materials and wages.”

The current labor crisis in the United States–that is, the lack of people applying for and maintaining employment, especially in low-paying positions–is creating some of the price increases since businesses have had to increase wages to compete for the limited pool of workers.

Inflation can occur in any product or service, including housing, food, medical care, and utilities, cosmetics, automobiles, and jewelry.

The housing market is seeing a large increase in prices with some homes in the Cleveland area being purchased for nearly double what they were purchased for ten years ago.

Some trace the rising prices to the rising cost of fuel. They say that petroleum and fuel companies are raising their prices and that in turn is causing other people who own smaller businesses to raise their prices due to the increased cost of getting items.  

Many blame President Joe Biden and the Democratic Party. According to an article that appeared in The New York Post, “Joe Biden fueled [inflation] with absurd fiscal policies that included continuing to pay people not to work when the economy needed supply to meet the rising demand post-COVID.”

Some also believe Biden also helped increase the prices of gas due to shutting down the Keystone XL Pipeline and ending trade with  Russia. The article stated, “Biden’s energy policies also handcuffed oil producers so much that gas prices — a key component of that the consumer price index — were rising before the Ukraine invasion forced Biden to ban Russian oil and gas and made $150 a barrel oil and $8 a gallon gas a real possibility in the coming weeks.” 

Some people believe that what is currently being called inflation is actually just the result of corporate greed. There is a belief that companies and stores are taking advantage of the current media message of economic inflation to charge more without need.  The logic is that if the American people are willing to blame the government for price increases, businesses can raise prices without consequences. 

Fortune published a story with the headline “U.S. companies post their biggest profit growth in decades by jacking up prices during the pandemic.” The author Will Daniel notes that 2021’s “corporate profit increases…soared 37% year over year, more than any other time since the Fed began tracking profits in 1948.”

At a Congressional hearing on inflation in February, Republican Frank Pallone (House Energy and Commerce Committee Chairman) stated that “Corporate greed is motivating large companies to use the pandemic and supply-chain issues as an excuse to raise prices simply because they can.”

Regardless of the reasons for the current jump in prices, American families are feeling it their daily lives and seeing the impact on their grocery receipts, at the gas pumps, and in small sacrifices to live with their budgets.