Why Lumber Costs Fluctuated Drastically During the Pandemic, and How It Affects Inflation

Could the wild swings in the price of wood over the past two years be a sign of inflation continuing to go up?

Throughout the COVID-19 pandemic, residential construction has been on a roller coaster ride of lumber prices—rising to record levels, falling close to pre-pandemic pricing, and now back up again. The nation also has seen escalating home pirces and rents, in part from the increase in the cost of lumber and other materials. PBS NewsHour's economics correspondent Paul Solman explores the volatility of lumber prices and its impact on inflation.

"I think lumber is a great proxy for inflation," Zonda chief economist Ali Wolf told Solman. "We have seen how choppy lumber prices have been. I think that's what we expect to see in a lot of different items across the economy as we go through next year and try to sort through the supply chain challenges and the labor shortage. Our belief is that costs will stay high, but throughout 2022, we will see the rate of growth start to come down."