ROANOKE, Va. – Seeing the tail end of the coronavirus pandemic, the economy is still trying to make a comeback, But with a high inflation rate, how far is your dollar really going?
Gas, cars, housing, even food prices are on the rise and it’s forcing some people to make a dollar out of just a few cents.
In May, the inflation rate was low at just 1.5%, according to Virginia Tech applied economics professor Dr. Mike Ellerbrock.
Now, just 30 days later, it’s up to 5%.
“So there’s legitimate concern about inflation in the United States right now,” he said.
This is putting extra weight on the shoulders of the hundreds of thousands of people who are still unemployed.
Megan Romeo with Virginia Career Works said that while daycare cost is still the main issue, finding a way to pay for fuel is another problem.
“In the Roanoke Valley, commuting is not an unfamiliar thing,” she said. “Most people do commute 30 minutes at least. That’s pretty much average of what folks expect.”
Though we are experiencing a high inflation rate right now, Ellerbrock said we are on the path to a better economy.
He said a 2% inflation rate will bring the economy back to restabilization and there are few ways to get there.
“What they can do is use tools, tax tools and the Federal Reserve can use money tools to moderate inflation,” Ellerbrock said.
This week, the Federal Reserve will determine if the interest rate needs to rise slightly to offset inflation.
A move that Ellerbrock said don’t be surprised about.
He believes by the end of the summer the economy will level out. Following that, we will see the real inflation rate that will affect us for the rest of the year.
His advice, for now, is to watch your pockets, find a job and start saving.