Jan 13, 2022 - Podcasts

How the inflation spike is affecting American wallets

New data shows prices rose faster within 2021 than they have in the last 40 years. Inflation hit 7% in December.

  • Plus, schools are trying to cope with a shortage of bus drivers.
  • And, Omicron and at-home COVID tests.

Guests: Axios' Neil Irwin and Alissa Widman Neese; and Dr. Jennifer Nuzzo, epidemiologist at the Johns Hopkins COVID-19 Testing Insights Initiative

Credits: Axios Today is produced in partnership with Pushkin Industries. The team includes Niala Boodhoo, Sara Kehaulani Goo, Julia Redpath, Alexandra Botti, Nuria Marquez Martinez, Lydia McMullen-Laird, Sabeena Singhani and Alex Sugiura. Music is composed by Evan Viola. You can reach us at [email protected]. You can text questions, comments and story ideas to Niala as a text or voice memo to 202-918-4893.

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NIALA: Good morning! Welcome to Axios Today!

It’s Thursday, January 13th.

I’m Niala Boodhoo.

Here’s what you need to know today: schools are trying to cope with too-few bus drivers. Plus, omicron and at-home COVID tests.

But first, today’s One Big Thing: how the inflation spike is affecting American wallets.

NIALA: Axios’ chief financial correspondent and friend of the podcast Felix Salmon told us last year not to worry about inflation, but new numbers show prices rose faster within 2021 than they have in the last 40 years. Inflation hit 7% in December. How do we put that number in context? We're not letting Felix off the hook, but he is on book leave right now. So we have our other favorite inflation expert here to talk through it. Axios’ new chief economic correspondent, Neil Irwin. Hey Neil.

NEIL IRWIN: Hi Niala, thanks for having me.

NIALA: So, I want to start by asking you what I've been asking Felix, is it time for all of us to worry about inflation, now?

NEIL: I think we're past time, the moment to worry, uh, if your wages have not been rising 7%, and I think a lot of people have not had that kind of raise. Uh, you're talking about a real deterioration in your quality of life and what you can afford. And, uh, that is cutting peoples’ living standards. It's causing a lot of pain out there.

NIALA: What, particularly when we're looking at prices, where are we seeing sort of the biggest increases when we're looking at just items?

NEIL: The biggest and most dramatic increase has been in car prices. Especially used cars, up 40% over the last year or so. That's just insane. I mean, that never happens.

NIALA: Neil, what do we need to know about what economists think will happen? Is there a light at the end of the tunnel? Do people think prices, inflation, will ease off?

NEIL: So, yes and no. The good news is that there's reason to think that we won't see this kind of 7% inflation in ‘22, ‘23, going forward. Because you know, some of these adjustments are one-time things. That said, there are some things getting baked into the economy right now that could keep inflation elevated, maybe not 7%, but higher than we're used to for-for quite a while to come. One of those is, we're seeing rents increase widely. We're seeing wages increase, which is good if you're making more money, but also means that employers are going to be inclined to raise prices whenever they can make up for those higher wages.

NIALA: What data points are you watching for? What should we be paying attention to in the near term?

NEIL: So I think the most important thing is how widespread the inflation is. If this was just about cars, just about oil prices, that's less worrying than when it's across the board all types of goods and services. We did see in, uh, in December, some of these service industries, restaurants, for example, did have pretty substantial price hikes. So that's a sign that there are some of these more widespread price pressures starting to happen. And there's no question, you know, if you've gotten no raise in the last year, if you've gotten a 2% raise, and the things you buy are 7% more expensive, you are worse off. The question is, how does it end? Do things kind of find an equilibrium as 2022 progresses, or does it take longer than that?

NIALA: Neil Irwin is Axios’ chief economic correspondent. Thanks, Neil.

NEIL: Thanks so much.

NIALA: In 15 seconds: how the biggest school district in Ohio is handling staff shortages.

NIALA: Welcome back to Axios Today. I'm Niala Boodhoo. We know that schools across the country are facing a staffing crisis. From teachers to janitors to bus drivers, staffing shortages are forcing many schools to cancel classes or to go back online. In Vancouver, Washington classes are now remote because of a lack of bus drivers. One Maryland county asked the Maryland National Guard for 200 people to drive buses.

Alissa Widman Neese, an Axios Columbus reporter, has been tracking the shortage in Ohio. Hi Alissa.

ALISSA WIDMAN NEESE: Hi, thanks for having me today.

NIALA: How is this shortage playing out in Columbus?

ALISSA: The bus driver situation is probably the most significant of the staffing situations for the Columbus school district. It's the largest district in the state of Ohio with about 47,000 students. Last Friday, the situation got so severe that the district was forced to cancel classes. There are several other districts in the suburbs here that have also had to either go completely remote or just make changes on a day-to-day basis, alerting families that, “Hey, you have to come pick up your kids an hour earlier than expected, or your kids might be late because there simply just aren't enough drivers in the seats for the buses.”

NIALA: What is Columbus trying to do to recruit more bus drivers?

ALISSA: The district has started to offer bonuses for bus drivers and other non-teaching employees. They're offering $2,000 over two years paid out in $500 increments. But, it doesn't seem like that has been enough yet to attract people there. I think they were hoping it would be a start.

NIALA: Alissa, this isn't just bus drivers that are facing shortages in terms of district staffing, is it?

ALISSA: There is also a big concern about substitute teachers in Columbus. The Columbus district has 616 active substitute teachers right now. In order to meet the needs of all the absences that are happening, they are hoping to grow that pool by 20%. Many substitute teachers just aren't picking up vacancies and filling in like they used to. Things are just so hectic sometimes they're having teachers fill in by just combining classrooms rather than having a substitute specifically designated for one classroom. So at the moment, they're staying the course but, can't imagine that it's an easy situation for families.

NIALA: Alissa Widman Neese is an Axios Local reporter based in Columbus, Ohio. Thanks Alissa.

ALISSA: Thanks so much.

NIALA: We’ll be talking about the staffing shortages at schools in the next few weeks as well as potential solutions. And we’d love to hear from you - If you’re a parent or teacher who’s had to fill in and help in any way at your kid’s school, you can record a voice memo and text it to me (202) 918-4893.

NIALA: One of the few things that seems clear at this point in the pandemic is that many of us are confused. Including about testing. So to get some clarity, we turned back to Dr. Jennifer Nuzzo [NUH-zoh], an epidemiologist at the Johns Hopkins COVID-19 Testing Insights Initiative, who we spoke to earlier this week about covid case counts.

Jennifer, I think a lot of the confusion centers around at-home testing. How should we be thinking about that right now?

JENNIFER NUZZO: So my advice is that home tests remain an important tool. But you know, don't disregard your symptoms. If you have symptoms or if you've been exposed to somebody and you get a negative test result, don't assume that you're safe. If you're not feeling well, or if you feel off, I think it's important to kind of stay home and isolate, for a few days until you can retest yourself.

NIALA: But what about people who get positive test results and then don't have symptoms or get positive test results on the rapid and then get negative PCR, because I feel like I’ve heard a lot of that.

JENNIFER: Yeah. So I think you should treat every positive as a positive until a qualified healthcare professional tells you otherwise. In the case of a rapid, uh, test that's positive, but a subsequent negative PCR test, really ideally you would talk to a healthcare professional, they’re going to want to understand, you know, what you were doing before the test, you know, how you're feeling etc. What I'm hearing more frequently is people who have symptoms. They take a rapid test and it's negative, but they really do have COVID. And it may be because there's less virus in their nose with this variant, then we've saw with other versions of the virus. That's why I think it's important to, you know, not disregard your symptoms, even if you get a negative, at-home test, and then try to up that test result a few days later, or particularly talk to a healthcare professional.

NIALA: Dr. Jennifer Nuzzo teaches at Johns Hopkins university, where she's also an epidemiologist at the COVID-19 testing insights initiative.

NIALA: One last thing before we got today. We know vinyl has gotten really popular again in recent years, with sales surging during the pandemic...But you might be surprised to learn that CD sales actually went up last year, too…after declining for 17 years! It looks like that might be at least in part thanks to Adele, whose album 30 had huge vinyl and CD sales. I’m also going to say: Gen Z, thinking all things old are cool. Thanks Gen Z!

That’s it for us today! I’m Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow morning.

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