Inflation spikes to 30-year high -- when will costs come down?

People across the country are seeing higher prices at the mall, grocery store and gas pump due to inflation. Experts predict it’s most likely to stay for a while.

Duke Economists explained in a panel Tuesday what’s driving the 30-year high – and when it will improve.

“We usually think inflation is driven on the demand side, usually often times by excessive monetary policy, when monetary policy gets too loose,” said Dr. Connel Fullenkamp, a Duke economist.

“In this case what we’ve got is both supply and demand factors going on. On the demand side of course we do have monetary stimulus in response in part to the pandemic and in part to ongoing monetary stimulus that’s been a part of the financial landscape for really over a decade or more,” he said.

Whether you’re filling up the tank or the grocery cart, people are feeling the strain of climbing prices.

“I think people are really struggling. As a family nurse practitioner I see people having a hard time with medicine and food and those are hard calls to make and nobody should have to make those,” said Monika Trogdon, who lives in the Triangle.

Those calls may be harder to make as the economic rebound remains uncertain.

The pandemic prompted supply and demand woes which sparked the inflation. According to experts, the new covid variant Omicron could bring short-term relief, but it may hinder the recovery of supply-chain problems longterm.

“So, there’s bad news for the longer term,” said Fullenkamp.

“We were hoping that the supply chain issues that were feeding the inflation would get resolved quickly, but with the rise of Omicron, one of the things it could do is both suspend production in different parts of the world and also continue to gum up the supply chain even worse,” he said.

The ongoing unknowns of what’s to come raise the biggest concern for most people trying to navigate their everyday lives.

“My grocery bills are much higher than they were last year. We track it and it’s been significantly more every month,” said Trogdon.

“We went to buy a Christmas tree and it was up 15 bucks from last year. Everything is getting expensive,” she added.

“For everybody else who may not be working, who may not know where their next meal may be coming from, it’s rough out here,” said Unek Carter, who lives in Raleigh.

Experts also warn if panic buying returns, it will only prolong the supply and demand issue.

“For non-perishables, if people are worried the prices of those are going to go up a lot, and they’re essentials, people may stockpile them,” said Emma Rasiel, a behavioral finance expert.

“Of course that has the impact of creating a vicious cycle as it becomes harder and harder to buy them,” she said.

“An inflationary environment tends to feed on itself if people make panicked short-term decisions. Inflation is self-fulfilling in many ways. If everybody believes there will be inflation, there will be.”

She also added this cycle will provoke many people to begin demanding more money from the companies they work for.

“If prices are going up on day-to-day essentials, employees will push for higher salaries because their cost of rent and food and other essentials is going up so they need more money to pay for it,” she said.

“Companies will try to push at least some of those wage hikes into higher prices for consumers. Again, this creates a vicious cycle,” she added.

People in Triangle say they will continue to take things day by day. “We just try to enjoy a lot of the things that are free already. The walks at the nature parks. Spending time enjoying your family members in ways that you don’t have to necessarily shell out the money for it. I think that’s the best way to go,” said Trogdon.

According to economist, prices and wages are likely to keep going up throughout the holiday season and well into 2022, but for how long and how much still depends on many variables.