GRAND RAPIDS, Mich. (WOOD) — Most Americans have taken notice of how much more a weekly grocery run is costing and how much more it costs to take a family out to eat.
Paul Isely, associate dean of undergraduate programs at Grand Valley State University, said this increase starts at the source.
“The price of seed has gone up, the price of land has gone up, the prices of interest rates to buy a new tractor have gone up. So the cost of producing food has changed,” Isley said.
Inflation in America is up and it’s affecting how we’re putting food on the table.
Isely has followed economics in West Michigan closely for years. He said the volatility in the market like the war in Ukraine is a big factor. Currently, there’s not as much cushion in the market which has sent prices soaring.
“You’re expecting it to be here, and it’s here. Now you have to change what you’re doing, change your purchases, make adjustments and that makes you feel bad,” Isely said.
Isely explains there’s a lot of psychology involved in how we spend our money. Paying more, buying less and getting less than we have in the past makes us feel like we’re struggling financially.
“Consumer confidence numbers are really, really low. They’re stunningly low, given how good the balance sheets are for consumers. Consumers’ balance sheets are really good right now. Up and down, they have trillions of dollars in extra wealth now, compared to what they had before the pandemic,” Isely said.
Isely said it’s that extra wealth that’s allowing people to continue buying even as the prices go up.
When it comes to dining out, many people are making some modifications to where and what they order when they go out, but they’re still doing it because they couldn’t during the pandemic.
“People are having to make a decision. Do you buy one beer or two beers when you’re going out to eat now? Do you get dessert? Do you get an appetizer?” he said.
Stimulus checks, housing values and because the stock market didn’t crash during the pandemic have Americans overall sitting comfortably according to the numbers.
“People have money. Not everybody. But on average they have more money than they had going into the pandemic,” Isely said.
Isely said the higher food prices are going to be long-lasting as the cost to produce food has gone up.