CLEVELAND — New numbers out Wednesday morning show inflation hit 8.5% in July, falling from a 40-year high of 9.1% in June. While many hope the month to month slowdown is a sign of improving economic conditions, consumers may not be out of the woods just yet.
The Greater Cleveland Food Bank was busy through the pandemic, but they’ve continued serving even more people as inflation has driven up everyday prices.
“We’re serving more people right now than we did at the height of pandemic in calendar year 2020, and a lot of that has to do with the fact that gas is more expensive, food is more expensive, utilities are more expensive,” said Jess Morgan, Chief Programs Officer, Greater Cleveland Food Bank.
Morgan said prices of goods over the past year have gone up. For example, she said a case of green beans used to be $9.99, now the Food Bank is paying almost $20.
Additionally, Thanksgiving turkeys, which the Food Bank buys in March to ensure they have enough supply, were $1.29 per pound last year. Morgan said this year, the turkeys cost $1.54 per pound.
“Because of that cost increase, we’re having to spend about $130,000 more this year on turkeys than we did last year,” Morgan said.
Higher prices are also impacting the way the Food Bank gets its food. Whereas Morgan said they source about 50% of their food from donations, last year that number was 32%. The Food Bank then has to buy food, at new, higher costs, to make up the difference.
“Food that we’ve sourced and have sourced for a number of years is even more expensive now than it ever has been before,” Morgan said.
According to Andrew Medvedev, incoming co-dean at the Case Western Reserve University Weatherhead School of Management, the new numbers are interesting, but as a single data point in time, aren’t necessarily something people should put too much weight into.
“There’s good news and not so good news. In the good news department, we are seeing that some of the things that drove inflation last year are starting to roll over,” Medvedev said, referencing certain supply chain issues easing and used car prices dropping.
However, he said at the same time, the problems that caused the increases have not necessarily been addressed.
“We’re not building enough housing, and I think that’s part of the reason we’re seeing rental inflation going up,” he said. He added that on the gasoline front, conditions that caused the spikes at the pump haven’t necessarily changed.
In terms of the new numbers shared Wednesday morning, Medvedev broke them down this way: “Prices of the things that we buy on an everyday basis have gone up by 9% in June, from June of last year, and by 8.5% in July from the prior July,” he said. “It doesn’t mean prices are coming down, it means prices are increasing at an ever so slightly slower rate than they were before.”
In other words, Medvedev said, “the average cost of living is going up at a slightly lower rate.”
Medvedev said inflation is four things, food, energy, shelter, and labor costs, key building blocks to the country’s economy. Medvedev said in his view, inflation has gone up because we haven’t invested enough in those categories, such as building new housing or investing in new energy infrastructure.
He also added that factors such as the great resignation potentially impacting labor force and dependence on global supply chains could continue to impact inflation.
“Any good news on the slow down is welcome, but we’re certainly not out of the woods,” he said. “It does not mean prices are coming down.”
The Food Bank is always looking for support in the form of donations and volunteers. Morgan said if families are struggling, they should call the help center at 216.738.2067.