'Just getting by': Inflation squeezing Las Vegas residents, businesses
Published in Business News
Las Vegas resident Michael McCarthy used to visit casinos about five times a month, but now it’s down to once a month for one reason — inflation.
“The prices of everything have gone up and stayed high,” McCarthy, a retired stockbroker, said after purchasing groceries from Smith’s in Spring Valley.
The government reported this week that U.S. consumer prices in February rose 6 percent year-over-year, down from January’s 6.4 percent increase from 12 months earlier and the 40-year peak of 9.1 percent in June. Core prices, which excludes volatile food and energy costs, in February rose 5.5 percent from 12 months ago, down slightly from 5.6 percent in January. The Federal Reserve pays particular attention to the core measure as a gauge of underlying inflation pressures.
While inflation has been easing, it’s still high enough to cause many Las Vegas Valley residents and businesses to worry. It’s also still well above the Federal Reserve’s 2 percent annual inflation target, meaning the central bank could raise interest rates again which could lead to higher rates on mortgages, auto loans, credit cards and business loans.
But the recent collapse of Silicon Valley Bank and Signature Bank has put the Federal Reserve in a “tight squeeze” when it comes to implementing further rate increases to tamp down inflation, said Stephen Miller, research director at UNLV’s Center for Business and Economic Research.
“(The bank failures) over the weekend have really called into question, what was the Fed’s next move?” Miller said. “We’ll find out next week.”
The Federal Reserve will meet Tuesday and Wednesday to consider next steps, and Miller thinks their decision will largely focus on the effects of the souring banking system on the economy.
“The next meeting is crucial,” Miller said. “What they do then is a signal about what may happen down the line in the next couple of months.”
Sales higher but profits flat
Able Baker Brewery owner Randy Rohde said the downtown Las Vegas brewery saw overall sales rise 25 percent in 2022, but its profit margin stayed about the same.
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