The Rise of Inflation in the US
Jonathan Osler San Francisco consulting and education expert as well as an expert in issues concerning philanthropy is highly concerned about the rate of inflation in his native San Francisco, but the nation as a whole.
He notes that the rapid rise of inflation affects nearly every aspect of the economy, but in particular, those with who are on the lower end of the economic spectrum.
When did inflation begin to get out of control?
Just over a year ago, the Fed was predicting that the rate of inflation for 2022 would be around 1.8 percent overall, and as the COVID epidemic seemed to be reasonably under control, nobody was really worried about economic inflation.
Yet, it didn’t turn out that way.
Back in February of 2021, the rate of inflation was at a mere 1.7 percent. And then it began to rapidly turn bad.
By March, inflation had climbed to 2.6 percent, and then in April, inflation jumped all the way to 4.2 percent. Then in May, inflation got worse, climbing to 4.9 percent.
By the time October and November rolled around, inflation had climbed to a staggering 6.8 percent, and by the end of December inflation had climbed up to 7 percent.
What went wrong?
One thing seems to be very clear. The Fed vastly underestimated the availability of goods in the supply chain as a result of COVID.
The economy took a nosedive from COVID in general when people were forced to work from home and also hunker down and essentially go nowhere.
However, as vaccines took effect and consumer demand began to spike, the supply chain, in particular the supply chain from overseas, could not be suddenly turned back on to pre-COVID days.
And the Fed also could not have anticipated the rather draconian policies in China in particular, that are locking down whole cities in an effort to control the COVID virus, even if there are just a few COVID cases.
As China alone exports over 14.7 percent of the world’s supply of exports, this means that just because people and businesses have a penchant for buying things, it means that there is a rather drastic supply chain crunch, one that the New York Times confidently asserts, will not return to normal until at least 2023.
According to Maersk, the worldwide leader in overseas shipping, the supply chain crisis will be be back to normal in a few months, but the New York Times says that is vastly
Meanwhile, the war in Ukraine is affecting countries in terms of both fuel and food supplies, and as this war is likely to continue for several months, it can’t help affect the overall economy and the rate of inflation.
The Fed predicts that through 2022, the rate of inflation will be roughly 4.3 percent.
Jonathan Osler San Francisco hopes that works out to be the worst of inflation, because Americans (as well as Europeans) cannot live with inflation rates of 7.5 percent and higher.
And in particular, inflation is really impactful for the poor, and the economically disenfranchised.