Gas prices. Food prices. Home prices. Interest rates. Inflation is dramatically driving up all of these–and more.
This should not come as a surprise. More than $5 trillion was pumped into the US economy to soften the impact of COVID-19 related layoffs and losses. Lockdowns in China have caused major shortages of many components and stopped the shipment of finished goods to much of the world. The aftermath of the war in Ukraine has caused food and energy shortages–which translate into higher prices. All of these factors are known to impact inflation rates.
Yet, the unemployment rate (which spiked through the roof at the peak of the pandemic) is near an all-time low and businesses across many industries are unable to find enough workers. Consumers are traveling again and demand for goods remains high.
So what’s going on? I’m not an economist, and I doubt even those who are trained in economic theory could accurately predict what will happen next. But one thing I know for sure: Panicking does no one any good–ever.
We’ve spent more than two years adapting to a global pandemic (which, BTW, is not over yet). We’ve survived inflation in the 1980s that was dramatically worse than what’s expected now. Americans can adapt to current economic conditions without major suffering–after all, no one is attacking us with missiles and bombs for the 85th day in a row.
Prices may go up for awhile. But there’s no need to throw confidence to the wind. This, too, will pass.
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