The inflationary pressure that spiked prices in Virginia is finally turning around.
The price of new cars is going down. So are the prices for blue jeans and microwave ovens. That's according to the Bureau of Labor Statistics, which shows even the prices of eggs and milk are dropping.
But business professor Oleg Korenok at Virginia Commonwealth University says it's true that some prices are coming down in some parts of Virginia, but he adds it's also important to look at the bigger picture.
"Let's say the price of eggs doubled and then went down by one percent. So, they [are] still expensive, [they’re] just a little bit down," Korenok says. "So, I would moderate the happy feeling that prices are falling and as a result everyone will be very happy."
They don't call economics the dismal science for nothing. Terry Rephann is an economist at the UVA's Weldon Cooper Center for Public Service who says the latest consumer price index is obviously good news for the economy. But, he adds, that the recent spike in inflation disproportionately harmed low-income people in Virginia.
"Lower-income consumers are really feeling the brunt of the impact of the high prices, and they’re the ones that are really pulling back on their consumption expenditures the most," Rephann explains. "And you see that in dollar stores and thrift stores."
The latest numbers are an indication that the worst price spike in four decades is steadily fading, which may trigger the Federal Reserve to cut interest rates.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
