COVID-19 taking toll on economy, experts say
Prices are falling across the board amid covid-19, but grocery store price tags are soaring.
"COVID-19 has thrown a huge wrench into the global economy. It is not a good thing,” Andrew Stevens, UW-Madison Applied Economics Assistant Professor said.
Grocery store prices are soaring showing the biggest increase in 50 years.
"That's uncommon historically but not unrealistic given the current situation that we're in," she said.
Stevens said there has been a shift in the supply and demand of different products.
"People are changing where and what they're eating,” he said.
Overall the price of groceries grew 2.6 percent in April, according to the Bureau of Labor Statistics. The food increase is led by the rising price of eggs spiking 16 percent and meat increasing by 3 percent.
"Over the last ten years for an example, Americans spent more money eating food away from home then they have spent eating food at home,” Stevens said.
Stevens said people started cooking more at home and the demand for groceries increased.
He said food producers could not quickly shift to meet the high demand resulting in higher prices.
He added, the coronavirus also disrupted the ability to keep up with the demand
"Packing plants that are sometime having to close down because of COVID-19 and that's a real pressure point on the supply chain for meat products,” Stevens said.
Stevens said with the change in prices across the board the future of the economy is unclear.
"It's very hard to look in the crystal ball and see what's going to happen even a month or two from now or even six or 12 months from now," he said. "In the short run there will be pain especially felt in certain places by certain people more so than others."