NORFOLK, Va. — You may have noticed the produce you usually buy at the grocery store is a few dollars more, or the used car you are interested in costs more than the estimated value.
If you're wondering why this is happening across the U.S., economic experts have a simple answer for you: COVID-19.
It's no secret gas prices are at an unusually high price. It's because the nation is experiencing an unusually high inflation period and Hampton Roads is part of this ongoing shift in the economy.
Economics professor from the School of Business at Old Dominion University, Vinod Agarwal, says with more people leaving the workforce from the start of the pandemic, it's now causing a big domino effect in the supply chain, and the U.S. is paying the price.
"It's not just production. It's distribution and then delivery to warehouses...and then delivery to stores," said Agarwal.
Agarwal says while the Port of Virginia isn't currently backed up, that doesn't mean it's the same story on the west coast. Ultimately, this impacts production in the Hampton Roads region.
Agarwal says this can easily drive up the prices, including things like your average makeup product, or that used car you had your eyes on. However, he says prices are also high because people are actually buying more.
He says since more people saved money during the height of the nationwide shutdown, they want to use this money more and travel as well. He says, though, the U.S. just cannot meet the increase of demand.
The U.S. Labor Department is reporting this year's consumer price index soared to 6.2%. It marks the biggest 12-month jump since 1990. Compare it to the CPI from December 2018 into December 2019, that number was 2.3%."
"We have lots of supply chain issues where simply production is not keeping up with the demand for the goods and services we have on a daily basis," said Agarwal.
Unfortunately, economists foresee this problem continuing into 2022.
"We did not anticipate the supply chain issues to persist as long as they have," said Agarwal. "We may actually see these problems continue into next year."
While he says the reason behind these inflated prices is simple, he says the way to help solve the problem is also simple: we must get better control of the pandemic and lower the number of COVID-19 cases.
"If we get control of the pandemic, our economy has a better chance of getting back to normal. So, please get yourself vaccinated," he said.
Agarwal says because people in low-income households could not afford to save money during the shutdown, they are getting hit twice as hard with the Consumer Price Index this year.