'Can't do it': Some Triangle residents scale back on Christmas as inflation surges to 40-year high

RALEIGH, N.C. (WTVD) -- Many people are having to pull out more cash or charge a higher amount when buying things these days. Inflation has surged to almost 7 percent, a 40-year high, and it's coming two weeks before Christmas.

"I stretched out (and gave a lot of gifts) pre-COVID, but since then -- I tell everybody 'I'm on a fixed income.' I get paid once a month," said Clayton resident Curnel Hawkins.

He's retired and on Social Security.

Hawkins said he is in no position to give like previous Christmases.

"I'm not buying or spending what I was spending last year -- with inflation and gas prices -- can't do it, can't do it," said Hawkins.

People are feeling a pinch every time they pick up groceries and pay the bill.

"(My bill is) probably about 50 percent higher," said Raleigh resident David Scowronski.

The USDA noted in its latest report that food items for the home increased 2.8 percent since 2020.

The beef and veal category saw the sharpest rise at 7.6 percent while fresh vegetables were the lowest at .8 percent.

The USDA said in the report that "no food categories have decreased in price since last year."

"This is a shock, especially for younger people because we've had very, very low inflation rates in the 21st century," said Michael Walden, a North Carolina State University professor emeritus and economist.

Walden said supply-chain issues are to blame and he warns what could happen next: When inflation shoots up, workers naturally need more money to continue living. Employers could give raises and then kick over the cost difference to consumers.

RELATED: Inflation will continue as consumers enter holiday shopping season, experts say

This is called in economics a Wage Price Spiral, and Walden said it is hard to stop.

"You really have to have the Federal Reserve come in and make the economy grow slower by raising interest rates, and literally pulling money out of the economy," he said. "The downside of that is that if it's not done very, very carefully with a lot of luck -- it'll cause a recession."

That could be bad news for President Joe Biden's administration, already dealing with the COVID-19 pandemic and a crisis at the southern border.

"Today's numbers reflect the pressures that economies around the world are facing as we emerge from a global pandemic -- prices are rising," Biden said. "But developments in the weeks after these data were collected last month show that price and cost increase are slowing, although not as quickly as we'd like."

Biden said we are making progress on "pandemic-related challenges to our supply chain, which make it more expensive to get goods on shelves, and I expect more progress on that in the weeks ahead."

Republicans swiftly responded to the dire economic news.

"For months, the Biden Administration told the American people that inflation is only temporary," said Sen. Richard Burr, R-NC. "Today's staggering report proves that isn't the case, with inflation rising to a near 40-year high. American families have already experienced skyrocketing price increases on everyday essentials. It's unconscionable that Democrats want to continue to recklessly spend trillions of dollars on their aspirational social spending package, which will only further damage our recovering economy and leave hard-working families to foot the bill."

Indeed, Biden touted his economic plan Friday as the path to recovery

"The challenge of prices underscores the importance that Congress move without delay to pass my Build Back Better plan, which lowers how much families pay for health care, prescription drugs, child care, and more," Biden said. "American families should not have to wait to get relief on the cost of prescription drugs like insulin or see their childcare costs cut by more than half.

The president contended that his plan will save a typical family of four $7,400 every year - "while easing long-run inflationary pressures on our economy."