Prices Rise at Fastest Pace in 30 Years

having to spend. Kevin Dugan, reporter at New York Magazine, joined us for how everything is costing more. Thanks for joining us, Kevin, sure, thanks for having me. Let's talk about inflation. It's uh the big concern of the week. It seems like we got some new numbers saying that prices rose six point two percent in October. This is compared with last year. This is the largest rise we've seen in three decades. And you know, we're seeing it

all over the place. We're seeing all the stories. Prices for everything is going up, food, home goods, rent is growing up. Everything's happening all at once right now, and you know, the era of cheap everything could very well be over. So Kevin, tell us a little bit about this. Right now, we are looking at price increases happening across the board because we have a lot of problems with the supply chain, and there are a lot of people

who have a lot of money. They have a lot of money saved up because they got to work from home and they got to save their stimulus checks and they weren't going out so much. There are esthmates that I've seen put around two and a half trillion dollars extra was saved at the beginning of the pandemic. So that means that companies know that people can spend a lot of money. We're talking about consumers here. Consumers make

up two thirds of the economy. So the reason why we're seeing this in some ways is because companies know that they can charge more and people will pay. And you know, we've seen wages go up as well in certain cases, and so some of those gains are just kind of being wiped out by all these higher prices. Now, wages have gone up a little bit, not as much as people are seeing in the grocery store or at

the gas station. Right gas is up almost and it's going to get worse because fuel oil oil that people used to heat their houses is up even more. So, you know, a lot of people have seen their wages increase because they changed jobs or because they were in the position to demand more money from their employers. But one of the problems here is whether this is going to continue to outpace how much people are getting paid and it effectively means that people have gotten less money

over the past year. What are we hearing when it comes to the White House, We're hearing President Biden saying this could be transitory, you know, meaning temporary. But you know, a lot of this stuff is tied to the supply chain issue that you know, we've talked about that on the podcast for a lot, and we we know that it's a problem right now getting all those goods stuck out at sea and just kind of getting things delivered

on time. But what we're hearing is that the supply and chain issues are gonna go well into two So does that mean that inflation, the high inflation that we're experiencing now, is going to last that long as well. Well. Part of the reason why inflation is up so much is because last year at this time, things were still pretty flat right, We're still dealing with prices going down during the pandemic economy. So look, it remains to be seen how much this will how much prices will rise,

or how long it will go. But if it continues at this rate, that would be very a lot. Biden has said that this is a major priority for him. In fact, it's such a priority that in the middle of the environmental summit going on, he is urging the Opeque countries to produce more oil because he right. I mean, it's it's a political liability for him. People need to fill up their cars, and even though your car might be it's well, it's probably worth more than it's ever

been worth. Most people can't just sell it. They need it. So it is a big political liability for Biden. But there's no quick fix to it. This is a global problem. What are some of the traditional remedies we have to fight an inflation? While they're not very fun. It's increasing interest rates, it's making it more expensive to borrow, it's making it more expensive to take out a mortgage. Um, those are all the things that we've been keeping low

up until this point. Exactly when Paul Vulgar was ahead of the fed. He spiked interest rates, as you know, deliberately. It is a way to shock the economy out of the inflationary pressures that were, you know, making it so difficult ago grocery shopping to buy food for your family. And it was very controversial at the time, but it ultimately did work to some extent, to a very large extent, even though there were you know, other repercussions that went

along with it. So it's probably not what the Biden administration would like to do, but that remains to be seen. Yeah, definitely something that needs to get under control. Obviously, those paychecks just aren't going as far when everything costs so much. But you did mention, you know, in the article there are some other positive signs for the economy as well, hiring a strong and a couple other things. You know, we talked about people saving up more money, so there

are some good signs still at least. It's just this is the one thing, I mean, this is one of the big things we've got to get under control. This is not like the nineteen seventies, right. We have unemployment that is getting much lower, We are coming out of a very quick recession. People's wages are rising. And you know, despite the fact that there are these supply chain issues, we're not seeing gas lines. People are able to get food, maybe just not exactly what they want when they want it,

so it's manageable. At this point, it looks like, well, we'll continue to see the effects of this and uh and how we try to remedy it. Kevin Dugan, reporter at New York Magazine. Thank you very much for joining us. Thanks for having me. We appreciate it. Have a good day. I'm Oscar Ramirez and this has been reopening America. Don't

forget that. For today's big news stories, you can check me out in the Daily Dive podcast every Monday through Friday, so follow us on I Heart Radio or wherever you get your podcasts.