Inflation hits gasoline, lumber and meat
While there is not a lot of inflation right now in the U.S. economy, there is inflation — prices going up fairly steeply — for three specific items: gasoline, lumber and meat.
Now, these are basic commodities that a lot of people buy — and businesses, the gas and lumber, anyway — and so it matters that they’re getting more dear. And we wondered why.
Like a “CSI” for inflation, let’s stick three pieces of witness evidence — it’s from economic analysts — up on the virtual whiteboard:
“Gas prices up 25% since the end of last year,” said Margaret Reid, vice president at Union Bank.
Robert Dietz at the National Association of Home Builders said in April lumber cost $350 per thousand board feet.
“Prices today are near a thousand dollars,” he said.
And for beef, poultry and pork, “In 2021, we’ll start to see pretty significant inflation in meat prices,” said Arun Sundaram, equity research analyst at CFRA Research.
Let’s start with gasoline. When the pandemic hit, energy demand plummeted and so did gas prices. Now the economy’s recovering and prices are rising.
Bad news for consumers like Stephanie Campbell of Dozier, Alabama.
“The gas going up, that’s going to drive up the price of propane, all that. And you can’t afford anything extra anymore,” Campbell said.
But Reid at Union Bank said many consumers have saved money from stimulus payments and paychecks, “which creates more buying power for consumers to be able to absorb inflation,” she said.
Next: lumber. The price has nearly tripled through the pandemic, Dietz said.
“Demand for homebuilding has gone up — you need more building materials,” he said.
Sawmills and lumber yards can’t keep up, so prices rise.
Meat producers’ prices are going up, too, said CFRA’s Sundaram.
“Domestically, demand should improve as the food service industry recovers from the pandemic,” he said. “Internationally, we’re seeing a significant increase in meat exports to China,” he said.
So a recovering economy boosts demand, squeezes supply and pushes up prices for energy, shelter and food.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
