Inflation has affected nearly every business in the Upstate after supply-channel disruptions and energy surges that have crippled businesses worldwide.
National inflation is 8.5 percent
According to the US Bureau of Labor Statistics, the national inflation rate sits at 8.5% year over year, but that doesn’t exactly tell the whole story. Electricity prices rose 32.9% over the past 12 months, food prices rose 10.9%, and new vehicles were 10.4% more expensive than last year.
Tom Barkin, president and CEO of the Federal Reserve Bank of Richmond, spoke Aug. 8 at an event hosted by the Greenville Chamber of Commerce and noted that before the pandemic, the United States was enjoying 10 of the most stable economic years in recorded American history.
Despite the Federal Reserve’s efforts to fight inflation by raising interest rates – a pattern the Fed has indicated will continue – inflation has persisted, increased and been broad-based, Barkin said.
“It’s like the aftershock of an earthquake – it takes a while for this amount of volatility to settle down,” he said.
As rates rise, the cost of borrowing rises and demand for goods such as houses falls.
But while the recent inflationary woes have lasted longer than economists expected, Barkin has highlighted some bright spots. Freight costs are coming down, he noted, and stores are seeing inventory increase. Meanwhile, the price of gas has decreased in the last month.
Adapt to local businesses
Steve Seitz, vice president and COO of Table 301, the parent company of local restaurants like Lazy Goat and Soby’s, says many of the price increases are things people may never see: higher costs for replacing air conditioning units, for example, and things like computers and technology. Increased cost of goods.
On the other hand, the prices of consumer goods have increased even more.
Take crab meat for example.
Before the pandemic, Sobey bought crab meat for $15 a pound. Since the pandemic, it’s been running around $36 per pound. Seitz said the restaurant has had to look for internal cost savings to avoid increasing prices to customers.
“Some of our restaurants haven’t raised prices by a penny,” he said.
Mary Walsh, co-owner of Swamp Rabbit Cafe & Grocery, has also seen several price increases — some she hardly noticed and some topping 20%. When sourcing eggs, locally owned grocers avoid what they consider harmful factory farms. However, farmers faced double the price of feed, which fell.
“We don’t want to make things prohibitively expensive, but we want to make things work,” Walsh said.
Although prices have gone up in some cases, he doesn’t see a noticeable drop in business. He might see someone switching from organic to regular milk, but he knows of no anecdotal evidence.
“I don’t think it hit us that hard,” she said.
Inflation: 12-month percent change Category 12-month % change All items 8.50% Food 10.90% Food at home 13.10% Food away from home 7.60% Gasoline (all types) 44% Electricity 15.20% New vehicle 10.40% Used car and 60.60. % Shelter 5.70% Medical care 5.10% Natural gas (piped) 30.50% Airline fare 27.70%
Source: US Bureau of Labor Statistics