[Epoch Times, August 14, 2021](Reported by Epoch Times reporter Linda Jiang from Los Angeles) As one of the most critical indicators to measure economic inflation, the US Consumer Price Index (CPI) has been rising since this year. Inflation also directly affects people’s daily necessities, food, housing, and transportation, ranging from housing prices and cars to vegetables and fruits. The rate of increase in prices has made many people overwhelmed.
According to data released by the U.S. Department of Labor on August 11, the CPI index in July increased by 5.4% from the same period last year, and rose by 0.5% from June. Although the growth rate has slowed slightly, it is still higher than expected.
In the past few months, William Yu, an economist at the Anderson School of Management at the University of Los Angeles (UCLA), has been concerned about the trend of inflation.
When the annual growth rate of inflation in April and May was higher than 4.5%, he pointed out that this is almost the highest value since the financial turmoil. In addition, the current US market is too rich and interest rates are low, and the situation is particularly severe. .
In order to avoid a financial crisis, he believes that the Fed can raise interest rates as soon as possible to give the market a buffer and tighten excessive excess funds.
“Food” prices doubled under inflation
Many people also have obvious feelings about this inflation: buying things are getting more expensive and daily expenses are getting bigger and bigger.
Ruby Quan, a Chinese-American wife in Los Angeles, cooks three meals a day for the whole family. “Because I buy a lot and a large amount, the contrast is very obvious. I used to go to the supermarket for more than a week to buy vegetables, which cost about 300 US dollars. Starting in May, the same vegetables and meat cost about 500 to 500. $600.”
She said: “Green vegetables are more scary than meat. For example, a cabbage flower used to buy a cabbage flower for only 3 dollars, but now it costs 6-7 dollars. Although there are some things that have not risen in price, the quantity is less. Sometimes a takeaway I can’t get enough to eat, even the buns have shrunk. A bag of quick-frozen dumplings, which used to sell for 23 dollars, has now risen to 25 or 28 dollars.”
Counting it down like this, she would have to pay hundreds of dollars more every month just for food. She told the “Epoch Times” reporter: “I have lived in the United States for more than 20 years. This is the first time for such an obvious and scary price increase. I have never been so nervous before.”
The U.S. Department of Agriculture (USDA) report updated on July 23 shows that so far in 2021, the price of home food consumption (food purchased in grocery stores or supermarkets) has increased by 1.6% compared with last year (average); purchased food ( For example, buying in restaurants) prices increased by 2.8%. The CPI of all foods increased by an average of 2.1%.
The Ministry of Agriculture predicts that the consumer price of food at home will increase by 2% to 3% in 2021, and the price of purchased food is expected to increase by 3% to 4%.
Mr. Huang (Hong Huang) is the purchase manager of a Chinese supermarket in Los Angeles. He said that it has become a normal phenomenon that the average price of certain commodities in many supermarkets has increased by 20%. “Importers told us that it was not that they wanted to increase the price, but that when the containers were towed, the cost of each container would rise very high.” Add it to it. But our profit remains the same.” He said that many commodities are rising in price, which shows the changes under inflation.
As a senior purchaser, he feels that he is a little sure about the current market price, “It changes every day. I know today, but I don’t know tomorrow (the price). I don’t know the price until the goods arrive.”
He said that this situation has been going on for several months. But “this is really unfair to consumers, especially our old Chinese goods, they have risen too far, I can’t imagine.” Mr. Huang mentioned that some local commodities have risen too much, but especially for imported commodities, some have risen as high as 60-80%. Specifically, he found that rice and instant noodles have not risen much, but the price of noodles has almost doubled.
Regarding the issue of containers, an inconvenient person in charge of a trading company told reporters that the price of containers now fluctuates too much. As far as their company is concerned, starting from April, the price of each pallet has been rising every week, and cumulatively, the cost of the entire container can rise by several hundred dollars each time, and it is still rising.
In addition, due to the large market demand and short supply, there is still a phenomenon of “grabbing” space in the industry. He said: “There is no empty space, money can’t be shipped, empty cabinets are in short supply. There are many reasons for price increases, such as inflation, exchange rates, etc.. When container prices rise, our prices will follow.”
According to the Freightos Baltic Index jointly launched by the Baltic Exchange and freight tracking company Freightos, the weekly market price of 40-foot containers (FEU) has more than seven times over the past two years. .
For example, at the end of August 2019, the weekly market price of containers was only US$1,350. By the end of 2020, the market price has slowly risen to more than US$3,000. However, entering 2021, the container market prices began to soar. In July alone, the price exceeded the 10,000 yuan mark, rising from US$6,970 at the beginning of the month to US$10,176 at the end of the month.
The price of restaurant ingredients soars, owners and consumers pay
In the past year or so, restaurants have experienced various restrictions such as not allowing open meals and other restrictions, and now they are experiencing inflation, said Jannet Gonzalez, owner of “Plant Love Food” restaurant. She fell into a state of struggling. “We mainly rely on agricultural products,” she said. “For example, mushrooms, they were more expensive in the first place, and now they are more expensive than we can afford. We have to use another (cheaper) mushroom instead (the special one we used before). Variety of mushrooms).”
She said that in the past, you could buy a box of mushrooms for $20, but now the price has doubled. When it was the most expensive, it was almost $100 a box; in the past, a box of avocados for $30-40 had risen to 60. US dollars per box, “sometimes even up to 100 US dollars per box”; even the humble tomato has doubled.
Not only that, but sauces, nuts, packing boxes, gloves and other items are all rising in price. “I think it (inflation) runs through, and almost everything, even the bills we receive, from electricity to natural gas to mobile phone bills is gradually increasing in price.”
In order to maintain the restaurant’s operations, Janet said that she was forced to increase the price of the dishes, but the increase was modest, ranging from US$1 to US$2. “Because I don’t want to double the price and scare customers away.”
However, she feels very relieved that many customers will pay more tips. “Our service staff will give tips. This makes everyone happy and everyone is helping each other.”
The car shortage sales model has completely changed
The blockade due to the epidemic has caused chaos on a global scale and shaken the supply chain. For example, the global chip shortage has caused the shortage of cars to reach a serious point, and car prices were once pushed up to record levels.
The auto consumption index in May climbed to a 13-year high, and about one-third of the increase was entirely driven by used car prices. The price of some second-hand cars is even higher than the marked price when buying a new car at that time. On this basis, consumers find that there is almost no room for “bargaining”, and it is fortunate that the car does not increase in price.
Diego Gonzalez (Diego Gonzalez), a salesperson for a Honda car in the Chinese district of Los Angeles, told the Epoch Times reporter: “For now, when selling cars, you have to think about giving a huge discount (as in the past). It’s extremely difficult.” “Now it’s a seller’s market, not a buyer’s market.” Another salesperson, Guillermo Cordova, said that now automakers are selling vehicles at prices higher than the manufacturer’s suggested retail price (MSRP). US$5,000 has become the norm.
Consumers seem to be aware of this change, Gonzalez said: “People will even use MSRP at a price of 10,000 US dollars higher than MSRP (rush to buy). Assuming that the car sells for 24,000 US dollars, it will eventually cost 30,000. , Sold at a price of 34,000. At this price, an additional license tax will be paid.”
In this way, the entire transaction process time is shortened a lot. In the past, consumers could spend a whole day bargaining with salespeople. Now the transaction will be completed in 3-4 hours, or even less. For future market changes, Kodovar said they have no way of knowing.
The housing market has cooled slightly but prices remain high
Under the epidemic, the most popular market is the US housing market. The shortage of market supply and increasing demand are one of the reasons why buyers “grab” housing.
The National Association of Realtors (NAR) reported on August 12 that, compared with a year ago, the median single-family existing home sales price in 99% of the cities surveyed in the United States has risen in the second quarter of this year. 94% of market prices have increased by double-digit percentage points.
In terms of specific prices, the median single-family existing home sales price rose by 22.9% to US$357,900, an increase of US$66,800 from a year ago. In three years, 46 housing markets have seen price increases of more than $100,000.
However, the housing market is changing rapidly. Peter Kam, the president of Parkview Real Estate, which has more than 350 real estate agents, said that the current housing boom is showing signs of cooling down, which can be seen from the degree of enthusiasm for “grabbing” houses. Out of this.
He introduced that, taking May as an example, when a house went on the market, quotations would be received in an average of 8 days. A house often received 25, 50, and 75 quotations at the most exaggerated time. Entering August, this anomaly has eased, and the number of quotes received by brokers has also decreased.
“The supply side has gone up a little bit now. In other words, there are more (housing) inventories.” At the same time, he said: “Demand has also dropped slightly.”
Although the housing boom has receded, housing prices remain high. Gan Minliang said: “Buying a house is not as difficult as it used to be, but the price is still high because of low interest rates.” On the other hand, consumers’ fear of inflation has also prompted people to buy real estate in a hurry. ◇
Editor in charge: Li Xin
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