Will inflation continue to rise? What's causing it? We talked to a local expert

FRESNO, Calif. (KFSN) -- Costs are on the rise from the gas pump to the grocery store.

Prices for goods and services increased 7% in the last year, according to the U.S. Labor Department.

There's even "shrink-flation" where the portions get smaller, but the prices stay the same.

"It's the same price, or, I mean, the same amount of money, but fewer items that we get, so yes, we can see the difference," said Mariela Aquino.

Aquino has four children and says her grocery bill has gone up by more than $100.

With her children home-schooled, she says her family has had to adjust their shopping list to keep them fed without overspending.

"We go for the cheapest item. Actually, in some cases, we don't have to like get the real one, so we go for the side brands we can find," she said.

While the grocery store is probably a pain point for all of us - the most significant contributors to the increase in inflation are the cost of housing and used vehicles.

New vehicles are in short supply, surging demand for used cars and trucks.

Dealers are also competing to add inventory to their lot.

"So whatever we have available, well shoot, we run to go get it," said Tony Lopez, finance manager at Fresno Autoplex.

That competition and demand are driving up cost, meaning less wiggle room for consumers to negotiate the price.

"A lot of people come in and tell me, 'hey, I want this vehicle for X amount of dollars,' well you can't. I purchased it for this much." Lopez said.

William Rice, a retired Fresno State professor, says "the big four" are contributing to inflation: a shortage of product, excess demand, increased cost of production, and manipulation of the market.

"I don't think you can point to any one of them as more than 50%. I think it's all of them, and I think it's changing," said Rice.

With pandemic relief money in hand and some panic-buying too, that clogged up supply chains.

Plus, many decided to retire or get a new job leading to a labor crunch.

The result is a perfect storm of limited supply and strong demand.

"There's a lot of these dynamics that are moving around that until they settle down, I don't know exactly when this will end," Rice said.

The federal government is discussing increasing the interest rate to help slow inflation, but Rice says economists are predicting prices will continue to rise through 2022.