TEMPLE, Texas — Editor's Note | Inflation segments are from a previous news segment from March 2022
Inflation measured by the U.S. "all items index" has risen 8.5 percent for the last 12 months since March. It's the largest 12-month inflation increase since December 1981, according to the latest report from the U.S. Bureau of Labor Statistics.
That means the items you commonly buy are costing more and will continue to cost more.
Some staple products have increased even more than 8.5 percent. The cost of flour is up 14.2 percent; the cost of butter and margarine is up 14 percent; meat, poultry and fish is up 13.8 percent and milk is up 13.3 percent according to CNBC.
On Tuesday, Eagle Strategies Financial Advisor Rolandus Johnson told 6 News families will need to budget more for groceries and rent in the foreseeable future. Johnson said he initially thought the "all items index" would show inflation up more than 7 percent but this was worse than expected.
"I wasn't expecting it to be that high," Johnson said. "You throw in gas prices and that's probably got a little bit to do with it since gas prices are increasing as quickly as it did."
Inflation is simply a rise in the cost of everyday consumer goods. Explaining why inflation happens, and how it will act in the future is much more complicated.
Unfortunately, Johnson said, it's likely these costs will continue to increase.
Some factors can raise the price of one good or service and create a domino effect for others. The quick rise in gas prices after the U.S. stopped importing Russian oil and the supply-chain shortages caused by COVID-19 are such examples. These factors could be reversed to some extent. The U.S. can find another source of oil and the pandemic is coming to an end.
There are additional factors that cannot be reversed however.
Johnson said the U.S. has printed money and therefore increased the amount of currency in circulation by sending the public multiple stimulus checks during the Trump administration. The government also passed a $1.9 trillion American Rescue Plan package during the Biden Administration. That printing of currency can actually de-value the American Dollar and result in higher prices for all consumer goods.
Printing money is nothing new but Johnson said it has been ramping up in recent years in an effort to jump-start the economy.
"I think over the last two years it was unprecedented to just print money like that. The stimulus packages, all of the loans that were given out and forgiven. There was a ton of money being given out. Money was being printed left and right."
Labor shortages have also indirectly increased the prices of goods across the United States.
Johnson said it's difficult to predict how inflation will continue but the government can't un-print money and there are still labor shortages and some supply issues. He said Texans need to keep monitoring the cost of food and be careful not to go over budget by mistake.
"Be aware of it. Don't find yourself in a situation where you didn't budget for it because you were thinking it was going to cost 'X' and instead it was 'Z'," said Johnson.