KNOXVILLE, Tenn. (WATE) — In the latest edition of Money Talks, the Director of the Boyd Center for Business and Economic Research with the University of Tennessee, Don Bruce, weighed in on the economy in terms of inflation with Halloween just around the corner.
What’s the latest on inflation and are there any signs of improvement?
- Bruce shared that in the latest report released a couple of weeks ago, for data through September, it showed 8.2% increase on an annual basis. He said this continues the very gradual downward trend since 9.1% in June, but is still far too high. He added one piece of relatively good news is that gasoline prices continue to fall.
What does this mean for the economy?
- Bruce said the Federal Reserve is going to need to continue to raise interest rates, which will increase the cost of borrowing money. He said the intent is to slightly pump the brakes on this hot economy and get things back under control without causing a deep or long recession.
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How is the economy doing, other than the high inflation?
- Bruce said the job market is still really hot. U.S. employers added 263,000 jobs nationwide in September, and the unemployment rate fell to 3.5 percent. He said the U.S. still has more job openings than unemployed people, and this places upward pressure on earnings. This will continue to fuel inflation, at least for a while, he added.
With Halloween around the corner, what does all this mean for trick-or-treating?
- The bad news is that candy inflation has outpaced overall food inflation in recent months, said Bruce. The question remains as to whether this causes people to buy less candy or maybe even turn off the porch lights on Halloween.
Don Bruce is the Randy and Jenny Boyd Distinguished Professor in the Haslam College of Business at the University of Tennessee with a joint appointment as Director of the Boyd Center for Business and Economic Research and Professor in the Department of Economics.