Inflation! The Aftermath of A Pandemic.

To round out the week here, we just wanted to touch on some general economy news as we find out more about what’s going to happen in the post-pandemic world. About a week and a half ago, we saw where April consumer prices surged in the past 12 months to the highest rate since 2008. Of course, 2008 was right before another crash and another economic slow down. What’s going on here? Is this the same type of consumer price surge that we saw in 2008? We don’t think so… because what we’re seeing is really price increases that are related to supply chain disruptions. Now these are problematic, but they might also reverse themselves.

We’re seeing prices of used cars go up because there’s a shortage in supply of new cars, primarily due to the computer chip shortage, which is caused by the pandemic. We’re seeing prices in the change of rental cars as more people are traveling. We’re seeing, as of today, a gas shortage on the Eastern side of the United States, due to the hacking of the Colonial Pipeline. Is that a longterm trend? No. We hope not. Food prices climbed 2.4%, which is a pretty good rise for food. Airline fares are going up because more people are traveling.

We’re seeing the unwinding of the slow down of the economy. We basically shut the world down a year ago, so certain prices just fell to the floor. Now we’re trying to use standard measures and compare ourselves to a year ago… well that’s a false measurement. We ought to be measuring it to the same month of 2019. When we look at the sharp increase in prices over the past 12 months, well, 12 months ago, we didn’t know what was up with the pandemic, we were just starting to find out the real truth about the virus, and we were all just staying at home. We just wanted to give a little perspective from our POV on the inflation fears that are going around. The stock market’s a little jittery. As of right now, the tech markets are crashing, or perhaps it’s just a correction, because they’ve been pretty inflated. Just have a little perspective, and don’t freak out. We don’t really think this is inflation… we think this is price corrections based upon short term supply chain disruptions.

Check out this Wall Street Journal article if you want to look at the numbers yourself! And if you’d like to discuss this further, please let us know how we can serve you!

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