SAN DIEGO — The latest inflation numbers are out, and it’s the highest it’s been in 40 years at 9.1%.
“The impact of this is that it's just cost more now to live,” said UC San Diego Economist, Alan Gin.
Gin explains why it's so high.
“Particularly, two areas surged," said Gin. "One is energy prices. So gas prices were up 60% compared to a year ago. The other area where there's been problems is in the area of food. Food prices are up considerably."
Like Republicans like to say, is it really Bidenflation?
"I don't think it is accurate," Gin said.
"There have been a lot of factors coming into play here. Again, the conflict in Ukraine has had a big impact. It's caused the world's oil prices to go up. There's also been some adverse natural disasters that have occurred. For example, one of the biggest areas in terms of the rise of food is, is eggs," said Gin. "They're up about a third compared to a year ago, and then also Poultry prices are up about 19%. That's because there was a big avian flu outbreak in the Midwest, and as a result of that almost 40 million chickens had to be slaughtered."
Will it go down?
“In terms of gas prices, I think we probably have seen the worst as far as that's concerned," Gin said. "And so I think we'll get better results when we look at next month's report.”
But couple inflation with a new blog post on Tuesday from the Public Policy Institute of California on a widening income gap, and it's the perfect storm.
The gap between high and low-income families in California is among the largest in the nation. Their survey found 71% think the state is divided into the “haves and have nots,” and the data confirmed that.
So, who are the haves doing well?
“What's happened is that we've become more of an information type of economy, and therefore, people with high skills and education are particularly benefiting from that situation," Gin said. "So, people involved in finance people involved in technology in the internet."
Gin added he believes California's income gap is among the worst because of the housing shortage and prices.
"If you own a home, you've benefited a lot from that," Gin said. "On the other hand, if you rent, you're adversely affected because rental prices have surged as well, and so it's more and more difficult for people to climb out of that rental situation and get into owner occupied housing."
The PPIC post found that the multiple rounds of stimulus checks actually helped close the income gap, but that was only temporary.
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