Inflation in June was 9.1 percent, reaching a 40-year high. Most of that was a result of gas and energy costs. Grocery prices are also 12.2 percent higher than they were one year ago.

"There's nothing that I can do as governor as it relates to fuel prices or groceries and people ask that question all the time but unfortunately, there's nothing we can do," Gov. Steve Sisolak, D-Nevada said.

Sisolak says he is doing things to reduce costs in other ways to counter the high inflation rate.

"We're making child care more affordable, we're investing in free community college tuition and we're going to work on broadband, has become less expensive," Sisolak said. "We've got subsidies for that."

During the governor's State of the State Address, he promised to make investments in several categories. One of those investments is $50 million for the Nevada Child Care Fund. American Rescue Plan funds will cover the cost for qualifying families to pay for child care.

$500 million is going into the Home Means Nevada Initiative. He says that money will help keep some of the most vulnerable Nevadans stay in their homes, including seniors, people with disabilities and veterans. $20 million is going to crisis stabilization centers for mental health. Schools will provide universal free meals for students for at least one year because of a $75 million investment.

While the governor hopes these programs will provide some relief from inflation, he also says the economy is doing very well in Nevada. Hospitality is thriving and more people are traveling to Las Vegas.

"The economy is coming back very, very strong," Sisolak said. "We're at pre-pandemic levels when it comes to the economy. Our budget, we're going to end up with a budget surplus in the next session."

It is unknown how much that surplus will be. 

Sisolak says supply chain issues and the labor shortage are affecting small businesses.

"A lot of them are doing well," Sisolak said. "The big problem they have is getting employees and I think with child care, it's one of the things that is going to get more people going back to work."

Sisolak pointed out that there are plenty of jobs available but that some people are not applying for them.

"There's 'Help Wanted' signs all over the place," Sisolak said. "It's just a question, you've got 25-30,000 people who are unemployed and 50-60,000 jobs. They're not matching up, so we're doing a lot in terms of retraining."

The governor is hopeful that federal policies will help to slow down inflation. The Fed raised interest rates by 1.5-1.7 percent in June. The 75 basis points were the highest increase since 1994.

"Prices are clearly going up, the cost of labor has gone up and hopefully, with the federal government taking some action, it's going to slow back down a little bit," Sisolak said. "I think that the Fed was probably a little slow in reacting and now they're reacting in big steps."

There are concerns that a recession could be on the horizon. Sisolak is concerned that it could affect Nevada's economy but he is not expecting it to be very severe, if it happens.

"The rest of 2022 looks good and 2023 is looking great, so I'm confident that we'll be in good shape and if there is a recession, which I hope there isn't...I don't think there necessarily will be, it'll be shallow and short," Sisolak said.

Meanwhile, the cost of labor is rising. Nevada's minimum wage is increasing 75 cents each year until it reaches $12 per hour in 2024. Sisolak says most entry level jobs have already surpassed that.

"When I drove by In-N-Out Burger on my way up here, last week, the sign said, I think $18 to start out," Sisolak said. "I don't think anybody's getting minimum wage anymore unless it's a really tip-intensive position."

Meanwhile, the pandemic is still a part of every day life. Nevada's 14-day moving average for daily new cases is 924. The biggest metric to gauge severity is the number of hospitalizations, which are not being overwhelmed.

"Our hospitalizations are way, way down," Sisolak said. "Our death rate is way, way down but COVID is still going to be here and I know a lot of the experts are talking that this is probably going to be a like flu vaccine that you're going to get on a regular basis."

The general election is less than four months away. Sisolak's Republican opponent is Clark County Sheriff Joe Lombardo. In a statement, he said that the governor is out of touch with reality.

"Across the state, Nevadans are struggling to pay rent, buy groceries, and get school supplies, all while Steve Sisolak has the audacity to brag about all that he and Joe Biden have done in Nevada," Lombardo said.