To end the week, let’s talk a little bit about the general economy and some of the major factors that you hear about may not understand: GDP, unemployment, interest rates, and inflation.
What we’re seeing right now is the United States is actually experiencing a little bit of inflationary pressure right now, as prices go up. We didn’t see much of that last year. Many people were out of work, and we saw price increases on items that became high demand such as paper towels and toilet paper, but that was only short-lived. What’s now happened since the vaccine was officially accepted is gas prices have started to tick up. You probably saw some of the lowest gas prices in your life in 2020. That’s turning around, and fuel and energy prices are a major part of the inflationary pressures. So as production begins to ramp up, as people go back to work, as demand for fuel goes back up, we will see the price for the fuel go back up. We will also see a lot of wells that were shuttered due to lack of demand come back online. I don’t think we’re going to see five dollar gas or anything like that, but we’ll get back up probably where we were before COVID-19 fairly soon.
The federal reserve is actually saying that they’re going to keep interest rates steady to combat inflationary pressures because they’re worried about getting the economy back to full employment, which as we know is a highly localized or state level thing at this point. Other good news is we are seeing unemployment fall. Applications for jobless claims are falling, which is a great thing. Layoffs which are pretty normal around the end of a year. This trend means that people are getting new jobs, so hopefully this year will be a huge increase in employment. We’re still at a 6.3% unemployment rate, which is historically pretty good, but almost double what it was before COVID-19.
As always, if we can help you understand any of these factors or anything else that you need to do in your business from an executive level, don’t hesitate to call!