With the government reporting Thursday that consumer inflation reached 7.5% over the past year — a 40-year high — the acceleration of prices is leaving few unscathed.
WASHINGTON — Since the pandemic erupted two years ago, Forest Ramsey and his wife, Kelly, have held the line on prices at their gourmet chocolate shop in Louisville, Kentucky. Now, they’re about to throw in the towel.
So having just tried to survive for the past two years, the Ramseys, who own three retail outlets and sell custom chocolates to about 25 bourbon distilleries, have reached an unpleasant decision: They’re going to raise their customer prices 10% to 30%.The struggles of Art Eatables illustrate how inflation and tangled supply chains have seeped into nearly every nook of the economy, forcing consumers and businesses to make painful decisions that many of them have never had to contemplate before.
Increased pay, though good for workers, has led many other retail and restaurant chains, from Starbucks to Amazon to Chipotle, to charge customers more. When Amazon announced last week that it was raising the price of its annual Prime memberships, from $119 to $139, it pointed to its increased labor and shipping costs.
Many big corporations say that even after they’ve raised prices, their customers have kept right on buying. Rising wages and higher savings, boosted by heavy government stimulus aid last year, have likely helped keep consumer demand strong. Over time, though, high levels of spending and wages can fuel further price hikes in a continuing spiral.
Rising apartment rental rates have emerged as a major contributing factor in surging inflation. Average rents rose 0.5% in January, the largest increase in 20 years, and are up 4.4% from a year ago.
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