Inflation surges 7.5% compared to 2021, the highest yearly jump in 40 years, report shows

HOUSTON, Texas (KTRK) -- The price at the pump might sting, but it's helping the Houston economy bounce back.

GAS PRICES ARE RISING, BUT THAT'S A GOOD THING FOR THE HOUSTON ECONOMY

The latest state jobs report shows logging and mining, which includes oil and gas, added 11,900 jobs in 2021. Workforce Solutions data shows that's the fastest-growing sector by percentage in the Houston area.

Right now, the price of a barrel of oil is around $90. Two years ago, it went below zero.

The price of fuel this year has risen 40% over the past year. Because of this, more oil and gas jobs have returned.

SEE RELATED STORY: US inflation soars 7.5% over past year, biggest spike since 1982

"Unlike many other places, the benefits accrue here to a lot of people making their money off of those higher energy prices," said Dietrich Vollrath, an economics professor at University of Houston. "The area is probably doing pretty well with the fact that gas prices have gone up."

An average number of December jobs for logging and mining in our area is 400. This past December, it was 2,300, which was the highest December number on record.

Workforce Solutions said many of those jobs pay more than the average salary in our area which is $55,000. More people getting higher paying jobs helps the gulf coast region.

"Those salaries then support home buying," said Michelle Castrow, a spokesperson for Workforce Solutions. "They support car buying. From that, then you have people who are providing services to either build those homes or sell the cars, maintain the cars."

INFLATION IMPACTING MORE THAN GAS, AND NEW DATA SHOWS BY HOW MUCH

You've probably heard gas, meat and milk prices are up. What about other items?

Over the past year, cereal is up by nearly 5%. The cost of getting your car repaired is up by 5%.

Eating out costs more by 6%. So does tobacco by 9%. Used vehicles are up by a whopping 37%.

"It feels pretty devastating," Chevy Eldrige told ABC13 as he filled up his van with gas.

"As a matter of fact, we're going to be doing some trips this year, and we're probably going to end up canceling half of them," Terry Mansfield said as he filled up his vehicle with gas.

Vollrath said COVID-19 restrictions and people quitting their jobs is fueling the higher prices. There are few people producing goods to handle the increase demand.

"This is a surprise in the sense that we don't know how to exit a pandemic economically," Vollrath said. "No one's ever done it before. It's not clear that we should've expected this or that we could've expected this. It's kind of a cruddy outcome."

At the grocery store, bacon is up 24% compared to last year, sirloin steak is up 23%, chicken breasts are up 13%, coffee is up 10%, and even chocolate chip cookies are costing you more by 8%.

SEE RELATED: Don't expect grocery store prices to come down anytime soon

EXPECT SEVERAL MORE MONTHS OF PAYING HIGHER PRICES

Vollrath said the higher prices are expected to last for several months.

"Are you likely to see prices demonstratively come down across the board? No. Are they going to go up even slower? Yes, probably by the time we hit summer that will have measured out," Vollrath said. "That seems to be the consensus guess."

Vollrath said a lot will depend on what the federal reserve does. It recently hinted it will increase interest on loans.

This means, if you want to buy a house or vehicle, the loan will be more expensive. Vollrath said this should cool spending, and help adjust inflation.

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