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Because productivity increases, the best way to stave off inflation, are sky high. I saw a report the other day that year-to-year productivity increases in the US were north of 5%.
Personally, I don't think we'll have a major recession, and perhaps not even a minor one, but I do expect to see pull-backs in the prices of some goods that have zoomed up in price in the past 15 months. I would be less surprised to see a significant correction in the stock market within the next 18 months. It will take some "event" to set it off, but as of yet no one knows precisely what that event will be.
We're not allowed to have "major recessions" anymore... The government will nationalize the entire economy and the Fed will print a quadrillion dollars before they allow another "major recession" to happen.
I keep hearing on the radio concerns about things that might cause inflation in the near future.
Our grocery bills have gone up 30+ % in the past six months.
Gasoline is up 30+% in the past few months.
I work in the construction industry. Our subcontractors are uniformly complaining about material and equipment cost increases of 30 - 200%. Labor increases of 30% or more and operating costs (fuel etc) increasing at the same rate. Prices for steel and lumber in particular have gone through the roof.
Eating out pricing has increased by about 65% and you really need to add extra tip so the wait staff can make ends meet since they have fewer customer. This makes it about 100% increase.
I bought a sheet of 3/4" treated plywood at Lowe's this weekend, it cost $71. A year ago it was about $24.
Six months ago haircuts cost $15. Now $22.
The price for municipal water also increased dramatically. I do not know the numbers because we only get a bill every three months, but our neighbors and people in adjoining towns are complaining loudly about the amount of the increase.
My understanding of "inflation" is that prices increase rapidly on all sorts of items. Why are we not deemed to be in inflation now?
We are in an "inflationary economy". The question is: How long does it last? All we can do are make predictions. My prediction is that it will last through the end of the year and than the economy will be back on track following the end of the Covid Crisis.
Its really unwise and unfair to not note the conditions that have resulted in the inflation. Factory shut downs, work slow downs, and business closures have caused pent up demand. It was necessary to inject money into the economy through stimulus payments, unemployment benefits, and PPP loans just to keep the country on its feet. Now, those dollars are temporarily chasing products and services that are not available. It won't last though. In a capitalist system vendors will compete for those dollars and will increase both production and employment.
Some patience is required right now. Its difficult. Everyone wants things to immediately go back to normal after Covid. However, life doesn't work that way. Its a process that can be accelerated, but we didn't get into in overnight and we won't get out of it that quickly either. The jobs report that was issued this morning indicates we added 550,000 new jobs to our economy last month. We are moving in the right direction.
I keep hearing on the radio concerns about things that might cause inflation in the near future.
Our grocery bills have gone up 30+ % in the past six months.
Gasoline is up 30+% in the past few months.
I work in the construction industry. Our subcontractors are uniformly complaining about material and equipment cost increases of 30 - 200%. Labor increases of 30% or more and operating costs (fuel etc) increasing at the same rate. Prices for steel and lumber in particular have gone through the roof.
Eating out pricing has increased by about 65% and you really need to add extra tip so the wait staff can make ends meet since they have fewer customer. This makes it about 100% increase.
I bought a sheet of 3/4" treated plywood at Lowe's this weekend, it cost $71. A year ago it was about $24.
Six months ago haircuts cost $15. Now $22.
The price for municipal water also increased dramatically. I do not know the numbers because we only get a bill every three months, but our neighbors and people in adjoining towns are complaining loudly about the amount of the increase.
My understanding of "inflation" is that prices increase rapidly on all sorts of items. Why are we not deemed to be in inflation now?
Your understanding of inflation is faulty. First of all, it's not based on what you as an individual pay for goods and services. Just because your particular barber increased his prices from $15 to $22 is not in any way an indication that other barbers or stylists raised their prices roughly 50%. My barber/stylist hasn't raised his prices a penny in the last year and a half.
Secondly, what your neighbors claim to be paying for water also has absolutely nothing to do with the price of water in your city or town. It is much more likely that they simply used more water this spring than previous billing periods than it is that your municipality raised the price of water "dramatically." And you don't have to wait to get your quarterly bill, you can simply make a phone call or go online and find out what the cost of water per CCF (or whatever unit your municipality uses). Water charges are also usually regulated as a utility so you also should be able to research the history of any price increases.
Third, it is utterly laughable that you believe that grocery prices have increased 30+ percent in the last few months and that restaurant prices have increased over 65%. I have no idea where you've been grocery shopping or where you've been dining out, but once again, your particular experience is irrelevant anyway. Inflation is not based on you finding an increase in a few items in a particular store or restaurant.
And finally, as to your complaint that gas has gone up 30%, you need to consider that prices were depressed last year due to a glut of gasoline because people were staying home and not driving all over. Now people are out and about again. It's simply supply and demand. Perhaps it will make you feel better to remember that gas prices are still lower than they were 10 years ago.
The experts our company relies on have been predicting a major recession in the third or fourth quarter of 2021 or possibly the first quarter of 2022, and have not changed that prognosis. Do you think prices will fall if there is a major recession, or do you think they are wrong and it will not happen? Is inflation a precursor to a recession? I have no idea.
What are they "experts" of? Certainly not economics. Not sure if you've noticed but we've been in a recession for the past year. All indicators point to significant growth for the remainder of the year, therefore the opposite of what your "experts" say will happen, we'll get out of the recession in late 2021 or early 2022.
If we have another recession it wouldn't happen until at least late 2022/early 2023 after the economy has fully stabilized. Inflation has nothing to do with it, and like someone said earlier it's probably temporary as production, and thus supply, begin to increase with the re-opening.
Your co. needs to fire those experts. Short of a shooting war with Canada or some other Crazy Ivan event there is essentially zero chance of recession this year or early next year. Everything points to the economy being too hot in the short and medium terms not too cold and if the Fed. must cause a recession in order to fight off inflation cause and effect would take 18-24 mos.
Also your grocery tab isn't up 30% in six months unless you buy really oddball foods.
A recession for the USA finally coming out of the Pandemic is just nonsense!
Your understanding of inflation is faulty. First of all, it's not based on what you as an individual pay for goods and services. Just because your particular barber increased his prices from $15 to $22 is not in any way an indication that other barbers or stylists raised their prices roughly 50%. My barber/stylist hasn't raised his prices a penny in the last year and a half.
Secondly, what your neighbors claim to be paying for water also has absolutely nothing to do with the price of water in your city or town. It is much more likely that they simply used more water this spring than previous billing periods than it is that your municipality raised the price of water "dramatically." And you don't have to wait to get your quarterly bill, you can simply make a phone call or go online and find out what the cost of water per CCF (or whatever unit your municipality uses). Water charges are also usually regulated as a utility so you also should be able to research the history of any price increases.
Third, it is utterly laughable that you believe that grocery prices have increased 30+ percent in the last few months and that restaurant prices have increased over 65%. I have no idea where you've been grocery shopping or where you've been dining out, but once again, your particular experience is irrelevant anyway. Inflation is not based on you finding an increase in a few items in a particular store or restaurant.
And finally, as to your complaint that gas has gone up 30%, you need to consider that prices were depressed last year due to a glut of gasoline because people were staying home and not driving all over. Now people are out and about again. It's simply supply and demand. Perhaps it will make you feel better to remember that gas prices are still lower than they were 10 years ago.
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