Back-To-School Shopping More Expensive As Inflation Increases Prices

Green Country students are getting ready to go back to school and many families are feeling their budgets busting at the seams.

Reports show inflation is the highest it’s been in 40 years.

Finance Professor Eric Olson said the Federal Reserve's preferred measure, called the Personal Consumption Expenditures, is the highest it’s been since 1982. That includes items like food and gas.

“Inflation obviously just means overall the prices go up, typically for consumers it matters which prices go up. Typically, when gas and food prices go up it makes people a little bit more anxious and they’ll throttle back spending in other areas of the economy so they might eat out less, they might buy fewer luxury goods. They might go on like a closer vacation, etc. and stuff like that,” said Olson, Associate Professor of Finance at TU.

Back to the classroom means back to the budget and this year's prices are forcing many people to cut corners.

Olson said the cost of things like school supplies and clothing are bound to be about 10-15% higher.

The National Retail Federation estimates each household will spend $864 on average for back to school shopping, up $15 dollars from last year and totaling nearly $40 billion in spending nationwide.

Meanwhile college students are expected to spend an average $1,199; that's roughly $74 billion nationwide.

The Federation aid's traditional back-to-class categories like computers and furniture have seen inflation ranging from 2-22% since 2019, while total expected spending for back-to-school and college grew by 36% and 41%.

Olson said three factors play a part in causing prices to surge.

“OK first, it’s the most intuitive. It’s high energy prices. Right? When gas prices go up that increases transportation costs and that in turn leads companies to raise prices higher. Second, we’d say fiscal policy. So back during the pandemic they sent checks out to everybody and at the same time that you had the pandemic hit, you had fewer goods and services coming out because of things like social distancing. So, you essentially had fewer goods and services being produced while more money was going out and that caused prices to go higher. And the third one is monetary policy and that’s by the Federal Reserve. During the pandemic they took interest rates down to zero and that is gonna increase the demand for anything you use a loan to buy. So, think houses, cars, etc.,” said Olson.

Olson said everything feeds into the consumer price index, which is just a basket of goods and services.

“Housing, rent, food, computers, etc. goes into this basket and all those prices went up at the same time,” said Olson.

The National Retail Federation estimates each household will spend an average $864 for back-to-school shopping, up $15 from last year.

In a comment on Facebook, one woman said, "at $230 she was like please nothing else" and ended up spending $250 on her granddaughter.

Another person said, "at least school supplies is mostly a one-and-done ordeal," but "spending $250-300 a week on groceries for a family of five is more than a little absurd."

A mom chimed in and said her family isn't hurting for money, but inflation is definitely hurting them.

A teacher commented and said she spends $1000 out of her own pocket on her class, not including her own kids

“We’re probably going into a recession, just to be honest with you. Hopefully, that will get prices coming back down, or at least inflation slowing up. I doubt prices are gonna go back down; with the rate of inflation, we’ll probably at least stabilize from where we’re at,” said Olson.

Olson said you can save by shopping online, using technology to do price comparisons, and taking advantage of tax-free weekend.