
Inflation hits 40-year high, but it’s not necessarily all bad news
By Kim Russell
The Consumer Price Index is out for March, putting the inflation we are seeing into numbers. First, the bad news: If you are one of the 1% of Michiganders who use fuel oil to heat your home, turn down your thermostat or you will be spending 70.1% more than a year ago. The cost of filling up your gas tank in March was 48% more than a year ago, and food prices are up about 8.8%. Overall, in the last year, the all items index increased 8.5%, the largest spike since 1981. “It is a little bit scary,” said professor Kevin D. Cotter, Wayne State University department of economics chair. Cotter says while there is reason to be concerned, it is not all bad news. “Food and energy costs have been bumping up largely because of the war and they almost certainly are going to come back down,” said Cotter. If you exclude historically volatile food and energy prices, inflation has moderated. “If you look at, for example, medical costs, those go up but they don’t go down, so the fact those aren’t going up so much is good news. The things that are going up the most are the things that go down just as easily,” said Cotter. Cotter says the pandemic continues to cause inflation, but there is also reason for some optimism that the Federal Reserve might be able to manage inflation without causing a recession. “The things that would lead to a recession, a drop in consumer demand or job losses, we are seeing the opposite right now,” Cotter said.