Economist warns against panic buying as prices climb this summer
RALEIGH, NC (WTVD) — Economists warn that the Federal Reserve’s raising of interest rates will help cool off certain types of spending and slow down inflation, but it won’t fix everything, especially the supply chain.
As prices are expected to continue climbing through the busy summer travel season, Connel Fullenkamp, professor of economics at Duke University hopes people will avoid pandemic-era hoarding.
“That is a concern of mine that rumors or — you walk into one store and they’re temporarily out of stock — it may lead to panic buying at other stores, and that can ripple through a community very quickly,” he said.
Fullenkamp said prices on gas and groceries will continue to trend upward even as high inflation has already set in; that’s thanks in large part to Russia’s war in Ukraine, COVID-19 lockdowns in China, people earning higher wages and a lot of Americans ready to spend on summer travel.
The ongoing baby formula shortage could linger as Abbott, the maker of Similac, continues to investigate following the February voluntary recall of much of its powder formulas.
“That’s a big problem when you take one of the major producers off the market,” said Fullenkamp. “For any kind of a good like that it’s going to create supply difficulties all over the country and I think it’s going to take a long time to play out because people want to make sure this product is safe.”
While prices on many other goods continue their climb, Fullenkamp said it will take time to adapt to the higher cost of living.
“We’re in for a period where people are really going to have to be much more careful about their shopping and really more strategic about how they spend their money and that’s going to last for quite a while,” he said.