WCPO: UC economist says wages can’t keep up with inflation
Michael Jones says consumers can purchase less than they could a year ago
Multiple disruptions to the U.S. economy are posing problems for consumers, according to Michael Jones, PhD, associate professor of economics at the University of Cincinnati Carl H. Lindner College of Business.
“Today, consumers could purchase about 2% less than they could a year ago,” Jones told WCPO.
Michael Jones, PhD, associate professor of economics at the University of Cincinnati Carl H. Lindner College of Business.
Inflation is at 7.9%, per the Bureau of Labor Statistics. Problems resulting from the COVID-19 pandemic, supply chain shortages and the war in Ukraine are driving the price of some products above the inflation rate.
“It’s primarily being goods relative to services,” Jones said. “And these are used cars, new cars, furniture, food at home. All of these categories are above the average inflation of 7.9%. Services like health care and education (are) actually quite low.”
Jones noted supply chain issues are being resolved in certain sectors of the economy, but pent-up demand from consumers is still prevalent elsewhere.
“They’re no longer able to afford that new car,” Jones said. “And as demand starts to drop because they can’t afford the borrowing cost, then you’re going to start to see those prices go down.”
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