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Inflation at highest level since 2008

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Posted at 5:10 PM, Jul 13, 2021
and last updated 2021-07-13 20:38:48-04

SAN DIEGO (KGTV) -- Prices across the nation are increasing at their fastest pace since 2008, and it's unclear when they'll level off.

The Labor Department reported Tuesday that annual inflation was 5.4 percent from June 2020 to June 2021, the steepest increase since the yearlong period ending August 2008, the middle of the Great Recession.

"There's just this big log jam as the world is reopening and producing, pipelines and supply lines can't catch up," said Lynn Reaser, chief economist at Point Loma Nazarene University.

Used car prices made up for most of the gain, but so did everyday purchases:

Gas prices are up 45 percent in the last year, apparel is up 4.9 percent, food at restaurants is up 4.2 percent, and electricity is up 3.8 percent.

Typically, the Federal Reserve wants to see 2 percent inflation.

The price increases have hit residents and businesses across San Diego.

"We just did an adjustment because of COVID, all the costs of supplies, all the additional costs of everything, but I have to wait to see the result," said Michel Malecot, owner of The French Gourmet. "We may have to adjust the price again."

The Biden Administration expects inflation to level off as the reopening continues, but it's unclear how long that will take. Reaser said if nothing changes in the next 5 to 6 months, concerns could grow - potentially meaning an increase to interest rates.

For measure, while restaurant prices rose above 4 percent, grocery prices grew only 0.9 percent, meaning money goes further when people eat at home.