PROVIDENCE, R.I. (WPRI) — Inflation has reached a 41-year high, and Americans are feeling the effects when they go to pay for everything from gas to groceries.
New data from the U.S. Department of Labor shows the consumer price index jumped 8.5% in the past year, the largest one-year spike since 1981. David Weil, a professor of economics at Brown University, told 12 News he wasn’t shocked to see such an increase.
“The inflation has been high for several months. It’s taken a couple of months for that inflation to work its way through the consumer price index,” he explained.
Weil said the reason for such an increase in costs stems from a few factors, but noted that oil prices are having a trickle-down effect on the entire economy.
“The king of them all is energy, it’s oil,” he said. “Oil is traded on the world market. When there’s insufficient supply in the world, that’s going to drive up prices here.”
At the end of March, President Joe Biden ordered the release of 1 million barrels of oil per day for 6 months from the country’s petroleum reserve in order to reduce prices at the pump.
Watch: Full interview with Professor Weil (story continues below)
According to Weil, bottlenecked supply chains are causing arbitrary shortages, which leads to an increase in the price of various goods.
One of the many industries impacted by these bottlenecks has been car dealerships, as a shortage of computer chips for newer vehicles increased prices by more than 12% — the highest ever in a single year.
While people may look to blame politicians for the rise in prices, Weil doesn’t believe that’s the case, saying it’s a residual effect of the country’s response to the pandemic.
“We had a very hard time during COVID. We did a lot of extraordinary things to keep the economy afloat, and if the result of that is we’re going to have to tolerate a brief period of inflation, that’s not a high price to pay,” Weil said.
Weil also said the ongoing conflict in Ukraine is also impacting the economy, now that the United States has effectively halted new oil sales from Russia.