INCREASING COSTS OF GOODS
WHERE DID THE PROBLEM START? 2019
The national prices of food and gas have increased since the start of the pandemic, which has a ected local businesses and nonprots trying to help those in need. Costs are anticipated to continue increasing through 2022.
Supply chain issues began nearly two years ago with the start of the COVID-19 pandemic. Included in this timeline are consumer price index gures for Texas, which measure the average change over time of prices of consumer goods and services.
NATIONAL COSTS
January 2020
February 2022
July 2019 CPI: 234.3 Robust pre-COVID-19 demand for goods from overseas reduces demand for locally produced goods.
$5
$4
March 2020 CPI: 234.3 The onset of COVID-19 halts
$3
2020
$2
April 2020 CPI: 231.8
overseas travel and trade. The return to production of goods is not universal, and many borders remain closed. December 2020 CPI: 235.1 A second round of stimulus funds goes out as part of the Coronavirus Response and Consolidated Appropriations Act. March 2021 CPI: 240.5 The American Rescue Plan Act provides another round of federal stimulus funding, continuing to create additional demand for goods.
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As people are panic- buying toilet paper,
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the rst sign of supply chain issues emerge. Goods that are able to be stocked on shelves do not meet the 40% increase in demand for the product.
Milk (fresh, whole, fortied, per gallon)
Eggs (grade A, large, per dozen)
Gasoline (unleaded regular, per gallon)
Ground chuck (100% beef, per lb.)
Bread (white, pan, per lb.)
Chicken (fresh, whole, per lb.)
SOURCE: U.S. BUREAU OF LABOR STATISTICSCOMMUNITY IMPACT NEWSPAPER
May 2021 CPI: 244.9
able to raise their prices to cover their increased costs indenitely, said Bobby Lieb, president and CEO of the Hous- ton Northwest Chamber of Commerce. “At a certain point ... people are going to say, ‘No more,’ and they’re going to cut back on their spending,” Lieb said. “If a company starts to cut back on its spending as opposed to raising prices, that means layos.” Painful price hikes Since early 2021, price increases have been rampant for certain items, accord- ing to the Bureau of Labor Statistics. Nationwide, the cost of meat, poultry, sh and eggs increased by 14.3% from April 2021 to April 2022, while the cost of fuel oil and gasoline increased by 80.5% and 43.6%, respectively. Fu Manchung owners Paul Huynh and Taylor Chung announced in March they were considering closing the Spring-based Vietnamese restau- rant. After receiving an outpouring of local support, however, they opted to renew their lease and will keep the restaurant open. “Grocery ination, amongst other rising costs, some supply shortages, shortage and inconsistency of labor, was making it tougher for us to want to continue,” Huynh said. Elizabeth Cleaver, a Spring resident and the owner of the Mum Queen, has been crafting homecoming mums for more than 30 years. However, Cleaver had to increase her prices for the upcoming school year due to the ris- ing cost of supplies. “Last October, I ordered like $2,500 worth of ribbon,” she said. “And the
next week, I was going to order some more, and the girl told me ... they had taken a price increase that morning of 17%, … which is unheard of.” Jessica and Matthew Lynn opened Lynn’s Table in Old Town Spring in April 2020. Since opening, Jessica Lynn said the duo has seen stark price jumps on meat, cheese, produce, paper products and disposable gloves. Meanwhile, the most notable price jump Fu Manchung has experienced has been for vegetable oil. While Huynh used to pay $18-$20 for a 5-gallon container, the cost is now $38-$40—a 105% price jump. Consumer prices in the Houston metro have been rising steadily since April 2021, according to the BLS. The consumer price index jumped 8.5% for the region in April compared to a year ago. “This ination is not going away anytime soon,” Lieb said. “There’s speculation that it’ll peak in the fall. … We’ll probably see it well into 2023 before we start seeing any kind of recovery. So we’re not out of it yet.” Supply chain challenges Many of the issues for businesses are related to the supply chain, which was halted as nations ceased trading and shipping early in the pandemic. According to Patrick Jankowski, senior vice president of research for the GHP, although many ports have since reopened, variant outbreaks still pose a threat to this system. In February, the U.S. Food and Drug Administration reported recalls of powdered infant formula
The CPI shows the cost of lumber is three times what it
was a year ago, delaying construction timelines or forcing builders to scale down projects.
2021
July 2021 CPI: 246.9 A shortage of semiconductors in the U.S. causes a
October 2021 CPI: 250.4 Surges in e-commerce and logistics disruptions
price hike in new and used vehicles, resulting in limited stock for sale.
lead to supply chain issues aecting businesses and consumers. Shipping delays caused by container shortages
January 2022 CPI: 254.5 COVID-19 cases are declining after months of increased cases caused by the omicron variant. Supply shortages and ination continue in Texas, posing challenges for consumers and small businesses.
at international ports compound the issue.
March 2022 CPI: 261.5 Ination continues to rise, especially for
2022
energy items such as gasoline and fuel oil, pushed in part by the conict between Ukraine and Russia, which intensied in late February.
SOURCES: SAM TENENBAUM, WWW.WHITEHOUSE.GOV, U.S. BUREAU OF LABOR STATISTICS, TEXAS COMPTROLLERCOMMUNITY IMPACT NEWSPAPER
The Greater Houston Partnership reported unemployment is down locally from 14% “early in the pan- demic” to 4.4% in March 2022. About 92% of jobs lost during the pandemic had been recouped as of March, mean- ing 28,000 more are needed to return to prepandemic employment levels. However, businesses will not be
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businesses are having to divert some of that burden onto custom- ers. The U.S. Bureau of Labor Statis- tics reported a year-over-year 8.3% increase in consumer prices nation- wide as of April 2022—the highest rate of ination since January 1982.
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