INDIANAPOLIS – As inflation rates hit a near 40-year high, many Indiana business owners say they’ve had to raise at least some prices due to higher shipping and production costs.
Last week, the U.S. Bureau of Labor Statistics announced prices rose 6.8% from November 2020 to the same time this year.
“It’s just a lose-lose situation for small businesses,” said Melissa Butrum, who owns Endeavor Boutique in Carmel.
Butrum said she has always tried to keep prices low at her clothing and accessory boutique. But she recently had to raise prices across her store 5% to 10%, mainly due to higher shipping costs.
“It is significant and everybody’s feeling it,” she said. “You feel it everywhere.”
Workers and shoppers are also feeling it at Monon Toys & Crafts in Broad Ripple.
Alla Kapchumova, the owner, said she has had to raise prices at least $1 on some items in her store.
She’s trying to do what she can to avoid passing more of the burden to her customers, she added.
“We are looking at what kind of packaging they have, so if it’s a lot of expensive packaging, we are trying to avoid those,” Kapchumova said.
Experts say there are a number of factors driving inflation to a near 40-year high.
“It’s that mix of rapid spending, turnover of money, high money supply and lack of workers and supply chain disruptions around the world,” explained Bill Rieber, economics professor at Butler University.
But the news isn’t all bad. Some economic experts expect prices won’t continue increasing at this historic rate as we head into 2022.
“We’re still going to see kind of bigger inflation numbers, but I think things will settle down a little bit after the holidays,” said Kyle Anderson, an economist at the IU Kelley School of Business.
Anderson said he doesn’t expect these higher rates of inflation to leave a significant long-term impact on Indiana’s economy.
“The prices will probably stay elevated, but I think that inflation will stabilize next year, and we’ll be back to prices going up 3% year-over-year rather than 6 or 7 [percent],” he said.
Inflation rates, in part, depend on supply chains.
Experts and federal officials have said it will likely take at least until the middle of next year for those issues to get resolved.