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Stats show many goods got more expensive last month

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Posted at 9:50 AM, May 13, 2021
and last updated 2021-05-13 11:50:43-04

New numbers out Wednesday from the Bureau of Labor Statistics show just about everything got more expensive last month.

Prices overall rose .8% from March to April. Inflation went up 3% from April of last year and consumer prices went up 4.2%.

It's the result of the issues in our supply chain right now and pent up demand as life gets back to normal.

But when you take into account the lower prices that we were seeing this time last year, the numbers don't seem as shocking.

“When the economy was under lockdown in 2020, price levels were actually declining, so on that basis, that compounds how much it looks like prices are rising,” said Greg McBride, Chief Financial Analyst at Bankrate.

Bankrate says price hikes are typical following a recession. But we won’t know how long these higher prices will last until the supply chain starts to recover.

“There's a lot of concern about whether or not this is a temporary burst of price increases, like we often see coming out of recession, or whether it's the beginning of a more sustained pattern of higher prices and frankly it's going to be months before we really have a sense of that answer,” said McBride.

If the price increases stick around, that’s when he says there could be a threat to long-term recovery.

Price hikes have hit some industries harder than others. For example, the index for used cars rose 10% in April as we experience a chip shortage for new cars. That’s the largest 1-month increase since 1953.

But drastic price changes since last year for things like flights and lodging are simply the industry getting back on track.

Because of this and other spending factors, a stock market crash isn’t a big concern.

“I think concern about a stock market crash is misplaced, definitely overdone. There are still a lot of companies out there making record profits. Yes, there are pockets of excess and there are certain companies, there are certain industries that could be particularly prone to a sharp pullback, but that's not limited to the stock market,” said McBride.