Hawaii residents feel the burden of rising prices as pent-up demand drives up costs
HONOLULU (HawaiiNewsNow) - The cost of US consumer goods shot up 5.4% in the past year — the highest its been since 2008, according to the Labor Department.
From groceries to gas, consumers will pay higher prices. But economists say this is temporary as the nation recovers from the pandemic.
Still, pent-up demand is driving prices up quickly.
“The pandemic has disrupted production and distribution, what we call supply chains,” said Paul Brewbaker, an economist with TZ Economics.
“That has caused prices to rise where demand exceeds supply in order to clear the markets and signal to producers to make more for which there are shortages.”
The latest local data from May showed inflation in Honolulu at a rate of 3.8%.
Currently, the average price of a gallon of gas was more than $4, according to the American Automobile Association.
The big concern of economists is an inflation cycle, where wages are dramatically raised to meet prices.
“You risk the potential of a kind of wage-price spiral,” said Jack Suyderhoud, a retired UH Business Economics professor. “Where wages drive prices up, and prices up drive wages up, and it gets this upward spiral that is very hard to combat. It would be painful to combat.”
Economists said buyers are already adapting to the changing prices.
“Past three, four months, slowly, everything gets more and more expensive,” said Scott Nonaka as he walked out of a Safeway on Wednesday.
“Every time you go to the store, you buy the same thing every week, and it’s higher every time you go to the store.”
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