Tucson businesses respond to rising inflation, higher prices

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TUCSON, Arizona (KGUN) – Inflation is rising all over the United States and here in Arizona, but local experts say we shouldn’t be too worried.

Moccasin shop owner Jesse Aguiar says his work process has taken longer than usual.

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

It took more than twice as long to get his supplies.

“There’s nothing I can do about it, so I’ll just have to wait,” said Aguiar.

The supplies are also becoming more expensive. Aguiar says leather prices only rose 10% in the last month. He says these costs will end up having an impact on customers.

“We haven’t increased our retail business yet, but we will likely do so soon after Christmas,” said Aguiar.

Aguiar is one of many entrepreneurs who need to raise prices. Last year, consumer price indexes in the US and major Arizona cities rose more than 5%. It’s nothing like the 13% inflation rate in the 1980s, but it’s something Americans haven’t seen in a long time.

“This is a big concern nationwide and here in Arizona,” Dr. George Hammond, director of the Economic and Business Research Center at the University of Arizona.

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

“We have increased federal support from the state so that people can spend more money,” said Dr. Hammond. “And then we have supply-side problems that affect a wide variety of goods and services.”

Hammond says these supply problems stem from a rapid shift to online shopping during the pandemic.

“I think we will need some time to reorganize these supply chains so that the goods flow through the warehouses and then through the delivery services,” said Dr. Hammond.

The high demand for goods also requires more employees, but many rethink their job after being in quarantine for so long.

“Pandemics disrupt our normal routines, and once those routines are disrupted, it takes time to get back to normal,” said Dr. Hammond.

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

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