With prices rising at grocery stores and gas pumps, everything seems to be getting more expensive. Current economic trends have been driven by a variety of factors, from staff shortages because of the pandemic, to the conflict between Russia and Ukraine.
“The price of cream cheese has increased by two dollars since I’ve started,” said gourmet pastry chef Arielle Page, who launched her online-order bakery Arie’s Confectioneries in 2020, and is about to open her first brick-and-mortar location in Evans.
Her dessert shop specializes bite-sized artisan cheesecakes, so cream cheese is, so to speak, her bread and butter. Page says that the gradual uptick in the prices of ingredients has begun to affect her business.
“Literally everything down to the packaging, bags and even receipt paper has gone up in price,” said Page, who is also a regular at the Augusta Market. “I had to sit down and run the numbers, and with me opening up a storefront, it adds a lot more overhead as well. So I had to really sit down and just make the decision to increase overall increase pricing for my cakes.”
Page does note, gratefully, that even after notifying her customers about her price increases, support for Arie’s Confectioneries has not waned, and she still sells out orders at the market and online.
“We’ve been affected to some degree over the past couple of years, really with the supply chain issues,” said Jennifer Tinsley, who has also observed creeping rise in costs amid managing her downtown health and beauty boutique Field Botanicals. She also says that inflation’s effects on the shop are mitigated, however, by being adaptable with brand choices of the products sold.
“We just have a couple of brands who may have products that aren’t available for a while,” Tinsley said. “We try to make up for that, and we deal in indie brands, so they’re pretty flexible. They’re not tied up into the processes that maybe some corporate brands are.”
Even the Salvation Army is citing the economic trends amid appeals for support. In a press release issued Monday, the Salvation Army of the Greater Augusta Area noted “inflation rising faster than wages and the uncertainty of a post-COVID economy” as have a particular impact on how much relief the nonprofit has had to provide.
“In June 2022, they served 5,641 meals, provided 2,512 bed nights, and gave 2,652 comfort kits,” said the press release. “They issued 30 clothing vouchers, put 17 individuals through their job skills class, and provided a stable home to two people experiencing homelessness.”
These matters have also been reflected on the stock market, sending some stocks tumbling. As the everyday consumer becomes impacted by these economic changes, there is much to wonder on what to expect in the coming weeks and months.
“Our economy is like a living, breathing animal,” said Wendy Habegger, a lecturer in economics and finance at Augusta University’s James M. Hull College of Business. “It rises and it falls, so it’s got peaks and valleys. It’s ever moving, ever present.”
On June 23, at Augusta Technical College’s second annual Mid-Year Economic Outlook Event, the keynote speaker was David Altig, executive vice president and director of research at Atlanta Federal Bank. Altig addressed inflation at length, including how the federal reserve goes about engaging it.
“One thing that about the summary of economic projections is that where do they come from?” said Altig to the audience during his lecture at Augusta Tech. “Well, we get to make a map and we can use models; they can use statistics, but everyone gets to kind of make it up. And you make it up under an assumption you get to make about appropriate monetary policy.”
Amid illustrations, charts, graphs and figures, Altig explained that the relevant numbers incorporate, ideally, the actions taken by the Federal Reserve to address whatever issues its economists think are pressing–in this case, inflation. This includes the federal funds rate, or the interest rate banks pay one another for borrowing money maintained at a reserve bank.
The Atlanta Federal Bank’s website explains that raising or lowering the federal funds rate affects inflation, and that “if the Fed needs to adjust interest rates and affect inflation, it uses open market operations, which is the buying or selling of government securities.”
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The need to fill voids in the job market caused by the pandemic also promises to be a hot commodity in the coming months. Habegger said this can add to the prices shoppers have to pay.
“Employers need to hire and they may have to pay a little bit more,” she said. “That means as consumers, we’re going to have to expect to pay a little bit more.”
About the current job market’s relationship to inflation, Altig referred to an idealistic scenario of slowing down the economy in such a precise way so that open positions go away, but current employment doesn’t decrease.
“That’s pretty precise for in the federal funds rate and the change in cost of borrowing,” he said. “This is a story that we sort of struggle with, which is, the impact of the fight against inflation is not proportionate. It affects different communities differently. And, you know, the, the reality of low and moderate income populations, is they are vulnerable.”
Due to its complexity, Habegger said no one person is to blame, and no one can make immediate adjustments to the economy. She also noted that many consumers contributed to the economic situation now seen because of basic supply and demand, with panic-buying during the early days of the pandemic.
As things are subject to change, a key takeaway appears to be that consumers should stay informed and make wise choices about investments of any kind.
“Certain polices might alleviate and/or contribute to inflation but no one person can fix it, it takes a series of fixes,” said Habegger. “It’s going to take a lot of little fixes.”
Skyler Q. Andrews is a staff reporter covering business for The Augusta Press. Reach him at skyler@theaugustapress.com. Correspondent Rakiyah Lenon contributed to this story.
