HILLSBOROUGH COUNTY, Fla. — In the latest Consumer Price Index report from the U.S. Bureau of Labor Statistics, inflation increased slightly to 2.7%.
“The biggest impact and biggest reason that people should care about this is because if prices of goods and services go up, you need more money to buy the same amount of stuff that you bought last month. If your salary isn’t going up by the same rate that inflation is, year over year, you’re essentially taking a pay cut,” said Thomas Stockwell, Assistant Professor of Economics at the University of Tampa.
Prior to this latest report, inflation had been on a downward trend.
“If you looked at the preceding 12 months, it was pretty much on a decline,” said Stockwell.
“Inflation rates were actually really looking good. They were starting to stabilize,” said Michael Snipes, Instructor of Economics at the University of South Florida.
Economists now predict the Federal Reserve will keep interest rates high due to the latest numbers.
The Fed is expected to make a decision about interest rates at a meeting this week.
“Most economists think this takes rate cuts off the table for this meeting. Most people are predicting that interest rates stay the same, the Federal Reserve keeps interest rates the same at this meeting because again we don’t want to lower interest rates because that would put more upward pressure on prices,” said Stockwell.
Now economists are watching to see if President Donald Trump’s tariffs and the possibility of more could be the cause of the increase in inflation.
“I think most economists right now are of the opinion that it’s still a little too early to tell if this is from tariffs or not, but you are starting to see some of those tariffs work their way through some of the essentials people are buying,” said Stockwell.
If we do see more impacts from tariffs, Snipes believes people will notice them at the grocery store first.
“Because those are prices that can change very quickly, and we import a lot of fresh fruit, meat, things like this,” said Snipes.
While it’s still difficult to predict what will happen, many experts believe it’s likely that inflation could continue to go up.
“I think the general consensus is that if all these tariffs do end up taking effect, they do get implemented, that we would see even higher price increases as we move towards the end of the year,” said Stockwell.
“I understand that this is one of the frustrations that people have with economists, and things like this, it’s impossible to say when things are going to happen… This most recent CPI report is kind of starting to show that these ripples are starting to come in. When the main wave is going to hit? Again, it’s impossible to say, but we are starting to see some initial ripples,” said Snipes.
