Are We Really Concerned About Inflation?
Consumers are having to dig more and deeper into family finances, whether it’s for the heating bill, pump prices, or making the monthly journey to the store.
Inflation is hindering individual consumers’ recovery from the pandemic and jeopardizing the global economy’s recovery.
For months, inflation figures have been climbing. Consumer prices in the United States climbed 5% on an annual basis in October, the highest level since 1990, according to official data released this week.
Consumer prices in the eurozone increased by 4.1 percent, the most in 13 years. The increase was 4.2 percent in the United Kingdom.
Inflation is more than double the central banks’ targets in all three countries.
Inflation is also on the rise in other parts of the world. It is currently 8.1 percent in Russia, nearly 11 percent in Brazil, and nearly 20 percent in Turkey.
The tangible reality of increasing gas prices, as well as higher prices for meat and other basic necessities, lies behind these abstract numbers.
Many food corporations in the United States are shrinking package sizes to avoid raising costs, a phenomenon known as shrinkflation. Restaurant owners have informed AFP that they have begun to eliminate items from their menus that have become excessively pricey, such as bottled water and crab cakes.
The global economy’s engine is sputtering back to life this year after halting in 2020. This rebound, combined with household swings in expenditure from services to products, has resulted in a surge in demand that has outstripped supply, which is still being hampered by the pandemic in certain situations.
Many basic resources, most notably crude oil, but also copper and wood, have seen their prices rise as a result of this.
The auto and mobile phone industries, in particular, have been affected by a shortage of semiconductors or computer chips.
Global transportation networks have also become congested. Some ports have gotten blocked due to a lack of personnel to offload cargo, while truck drivers are in short supply in the United Kingdom. The cost of shipping has risen dramatically.
The drumbeat from central bankers concerning inflation has remained consistent: it is temporary since it is the product of last year’s low point of comparison, and it is driven by short-term supply difficulties that will fix themselves.
With the passage of time, the argument has grown stale.
“It is now evident that this process will take longer than anticipated, and inflation will be a factor.” The Washington Newsday Brief News is a daily newspaper published in Washington, D.C.