HOUSTON, Texas (KTRK) -- A membership at a wholesale provider can't even hide higher prices caused by inflation.
WHOLESALE INFLATION SURGED 9.7% FROM LAST YEAR
On Tuesday, the U.S. Bureau of Labor Statistics released its producer price index. It shows that wholesale inflation rose 9.7% from January 2021.
This impacts businesses that shop wholesale before it hits the consumer. However, it can affect people who shop wholesale at Costco and Sam's Club.
"It's kind of a bummer, you know? That's the beauty of going to the wholesale stores. You get things for cheaper than most other places," shopper Sarah Smith said.
"While some of those companies buying bulk could help you save money," explained Jorge Barro, a public finance fellow at Rice University. "That's always been the case, and I don't think that's going to change, but I wouldn't expect to be able to overcome those inflationary pressures just by buying bulk instead of buying regular retail."
WHY ARE PRICES ON THE RISE?
It's not just the producer price index going up, so is the number impacting consumers. Last week, the inflation number on goods was the highest in 40 years.
"It's a little frustrating because it's like OK, why is bacon almost $5 now, or cereal went up a lot too," shopper Bresha Lyles said. "I buy name brand. It's like $4.33 or $5 for a box of cereal."
Economists say inflation is tied to government spending and the ongoing labor crisis. The federal government approved trillions of expenditures during the pandemic and sent stimulus checks to Americans.
This allowed neighbors to have more money to buy goods. At the same time, producers are dealing with a labor crisis. Businesses can't find workers, and Americans are quitting their jobs in record numbers.
With demand for goods rising and not enough production, it's caused the price of items to go up.
"I think most economists expect inflation to come back down in the next year or two," Barro explained. "The question on everybody's mind is whether inflation will come back down to the level that we saw before the pandemic?"
"The question on everybody's mind is whether inflation will come back down to the level that we saw before the pandemic."
THE INFLATION FIX COULD BE COMING, BUT IT COULD MEAN THE HOUSE OR CAR YOU BUY WOULD COST YOU MORE PER MONTH
Economists are waiting to see what the Federal Reserve does. The agency hinted at raising interest rates as a way to cool inflation.
If it does, it will impact loans. This means if you need a loan to buy a home or a car, the interest will go up, which means your monthly payment would go up.
"Rising interest rates are going to hurt anybody looking to finance on any major purchase," Barro said. "So, generally, what I would say is if you're looking to make a big purchase over the next year or two, make sure to take into account the potential increase in interest rates."
The Federal Reserve is scheduled to meet on March 15. It may not be the only time interest rates are adjusted.
Economists said to continue to cool rising prices; interest rates may be changed throughout 2022, which could lower inflation over the next couple of years.