Is permanent inflation a byproduct of continuing supply chain disruptions?
Oct 19, 2021, 5:00 AM
(Stock photo)
(Stock photo)
SALT LAKE CITY — The ongoing global supply chain disruptions are creating scarcity and price increases, but will the inflation be permanent?
A blip on the radar or is permanent inflation here to stay?
Prices for a variety of items are at their highest in more than a dozen years. Everything from breakfast foods to the things you find at the local dollar store are more expensive.
One visiting professor of economics at the University of Utah, also an economist at a Washington D.C. firm, says the car industry has been affected most.
“People can’t get new cars, they’re shifting to used cars,” says Dean Baker, senior economist for the Center for Economic and Policy Research. “Some people need a car and suddenly it’s going to cost them $2,000 more than it did a year ago.”
Baker acknowledges the problems these situations create for Americans. However, he does not feel the supply chain problems have had as large of an impact on most people.
“I was making a joke with someone just a while ago because I went to the supermarket. My wife has this brand of peanut butter she likes, and she likes crunchy. They didn’t have crunchy in her brand and I either had to get her a different brand or get her creamy. That’s an inconvenience. Something to get really upset over? Pretty hard to get too angry about that,” he laughs.
Read more: Utah trucking companies feel strain from country’s supply chain problem
Economists are arguing whether the current inflation will be a long-term problem in the U.S. Some say the supply chain headaches will lead to lasting economic damage. Others believe the issues will mostly go away once lines of shipping freighters at the Port of Los Angeles and others are caught up.
“Once the backlogs are cleared through, presumably the price increases will be largely reversed,” Baker says.
That said, Baker is under no illusion that will happen overnight.
He says, “We want to get through this as quickly as possible. No doubt about that. Like everyone else, I hope this is a matter of months, not years.”
In his estimation, Baker believes the supply chain disruptions and shipping delays will be nonexistent by early 2022.
Read more:
Utah Inflation: How is an uptick in prices affecting Utah?
Utah Inflation: What is causing the spike in prices?
Inflation skyrocketing across the US, food bank managers worried about rising costs
