“I think we’re going to see some form of inflation going forward for the entire country.” – Michael Hecht, President and CEO, Greater New Orleans, Inc.
When the top man of the region’s economic development organization is talking about inflation, it’s time to listen.
Michael Hecht says rising prices are something to pay attention to when it comes to restarting the local tourism economy.
“If you look at the numbers that just came in, we saw a 4.3% increase in this month versus a year ago. That’s the biggest increase in inflation in over 13 years. Year-on-year.”
Hecht says one reason prices are on the move is greater demand and less supply as the country re-opens and supplies of gas, food, and other items are low.
“However, the way that higher oil prices do lead to higher gasoline prices,” Hecht says. “That will undoubtedly affect the drive-in market. It might make airline tickets more expensive if the price of Jet-A goes up.”
That could cause a slowdown in the recovery as people rethink taking vacations to save money for rising prices.
Hecht says rising prices across the board are not good when trying to restart the tourism economy of the region.
“I think to some degree if we do see prices start going up and people feeling squeezed about prices or their debt payments that will undoubtedly have some kind of cooling effect.”
Most of the inflation we’re experiencing at the moment is supply and demand based.
The economy is starting to pick up and things people rely on: gas, food, household goods, clothing, etc are in short supply because people didn’t need them during the pandemic.
Even Louisiana’s rising gasoline prices are blamed not on the supply of fuel, but the shortage of truck drivers to deliver the fuel.
But there is one driver of inflation in the back of Hecht’s mind that has him talking:
“The six-trillion (dollars) plus being proposed by D.C. to come in, in the families plan, the jobs plan, and the recovery plan, it’s hard to believe that we could put that much money in the market and not cause some kind of inflation at a national level.”
Hecht says the reason inflation is dangerous is because once prices go up, they rarely return to the prices they were.
