INDIANAPOLIS (WISH) — A new report put inflation at 6.2% in October, which is the highest level since the first Gulf War 30 years ago.
In May 2020, during the height of the pandemic, a gallon of unleaded gas costs $1.85.
“It was about $3.19, I think. I drove down from Fort Wayne. … I don’t remember it being that expensive since the Obama times,” said Indianapolis resident Vipul Nandigela.
Ball State economics professor Michael Hicks attributes the sharp increase in prices to a “deflationary” period at the height of the pandemic. He says prices of common goods are only 4% higher than they were before the pandemic.
“The worst synchronous global economic shock ever, so we are now recovering from that. There are countries that are finding it harder to manufacture because people are ill. We’ve had 200,000-plus workers die from COVID in the U.S.,” he said.
Thirty years ago this month, the U.S. also experienced high inflation during the first Gulf War.
“There was a war. There was a big shock to oil and food prices as transit through the Persian Gulf was interrupted,” Hicks said.
Hicks expects prices to remain high through the holidays and level off afterward. If they continue to increase into the spring, it could spell trouble for the economy.