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Tucson businesses respond to rising inflation, higher prices

Local businesses respond to rising inflation, higher prices
Posted at 11:19 PM, Oct 20, 2021

TUCSON, Ariz. (KGUN) — Inflation is rising throughout the United States and here in Arizona, but local experts say we shouldn't be too concerned.

Moccasin shop-owner Jesse Aguiar says his labor process has been taking longer than usual.

“I don’t have the leather to finish their order, because I can’t get it,” said Jesse Aguiar, Co-founder of San Agustin Trading Company.

It’s taken more than twice the average time to get his supplies.

“I can’t do anything about it so I just have to wait,” Aguiar said.

The supplies are also getting more expensive. Aguiar says prices for leather went up by 10% just in the last month. He says those costs will end up affecting customers.

“We haven’t raised our retail yet but we will probably right after Christmas,” Aguiar said.

Aguiar is one of many business-owners having to raise prices. This past year - the consumer price index has increased by more than 5% in the U.S. and in major Arizona cities. It’s nothing like the 13% inflation rates of the 1980s, but it is something Americans haven't seen in a while.

“It’s a big concern nationally and here in Arizona,” Dr. George Hammond, the Director of Economic and Business Research Center at University of Arizona.

Dr. George Hammond at the University of Arizona says there are a number of reasons for rising inflation. One is the combination of a high demand for goods and a low supply.

“We have increased level of federal support coming to the state so people have more money to spend," Dr. Hammond said. "And then we have supply side issues that we’ve seen affecting a variety of goods and services.”

Hammond says these supply issues come from a rapid shift to online shopping during the pandemic.

“I think it's taking us some time to reorganize those supply chains so that the goods flow through warehouses and then through delivery services,” Dr. Hammond said.

The high demand for goods also requires more employees, but many are reconsidering their jobs after so much time in quarantine.

“Pandemics create disruptions to our normal routines and once those routines get disrupted it takes time for them to get back to normal,” Dr. Hammond said.

Hammond predicts inflation will remain above 2% for about another year.

Inflation rates in the U.S. 1960-2021
Inflation is rising throughout the United States and here in Arizona.