November 17, 2021

Prices are spiking for homes, cars and gas. Don’t be alarmed, economists say

Idled by the pandemic, oil production was reduced for months. Now, with a rapid restart to the US economy, production is struggling to match demand — and prices are spiking. (AP photo by Charlie Riedel)

The cost of homes is soaring — and so is the cost of the lumber to build them. The price of cars and gas are up sharply, too, as are prices for products ranging from corn to computer chips. Now worries are rising that as the post-pandemic economy comes back to life, a sustained surge of inflation could undermine the recovery.

The U.S. Department of Labor reported yesterday that the Consumer Price Index rose 5% in May, following a 4.2% jump in April. But at UC Berkeley, high-level economists are offering some calming advice: A measure of inflation is inevitable as the U.S. economy comes back online, but it will likely be modest. And it will almost certainly blow over as…

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