US inflation highest in 40 years, East Texas economy experts warn no letup in sight

TYLER, Texas (KLTV) - From the grocery store, to the gas station, and just about everything in between, Americans are feeling the pinch of inflation.

Earlier this month, the Labor Department said consumer prices jumped 7.5% last month compared with a year earlier, the steepest year-over-year increase since February 1982.

When measured from December to January, inflation was 0.6%, the same as the previous month and more than economists had expected. Prices rose 0.7% from October to November and 0.9% from September to October.

Shortages of supplies and workers, heavy doses of federal aid, ultra-low interest rates and robust consumer spending combined to send inflation leaping in the past year.

“For most people, for many people, this is the worst inflation they have ever seen,” UT Tyler Professor of Management Harold Doty said. “The federal reserve targets our inflation rate for about 2%. That’s a nice steady rate. The trouble is it’s running at about 7.5 percent and so it’s not that inflation is bad, it’s that too much inflation is bad.”

The rise in prices is not because of one factor, but rather, somewhat of a perfect storm.

“It’s hitting every part of our economy. A lot of that is based on a global pandemic, but some of it is based on a new administration that views things differently than the last, and it’s caused by the global, geopolitical events,” Tyler Economic Development Council CEO Scott Martinez said.

“We should begin to see, in the next couple of months, the real sharp increases tapering off some,” Doty said. “I won’t say it is going to get good yet, but I think in the next few months it should start to hurt less.”

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